What would be the optimal order quantity

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Reference no: EM132298388

Jacqueline’s Sleep store sells water beds and assorted supplies. Her best selling bed, the “Comfort King” has an annual demand of 400 units. Ordering costs are $40 while Holding costs are $5 / unit / year. (Show all work for each problem)

a. To minimize the total cost, how many Comfort King beds should be ordered each time an order is placed?

b. If the Holding costs per unit are $6 instead of $5, what would be the optimal order quantity?

Reference no: EM132298388

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