Vicky Payne sells beauty supplies.Her annual demand for a particular skin lotion is 7,000 units.The cost of placing an order is $10, while the holding cost per unit per year is 10 percent of the cost.This item currently costs $2.50 if the order quantity is less than 1500.For orders of 1501 units or more, the cost falls to $2.45.To minimize total cost, how many units should Vicky order each time she places an order? What is the minimum total cost?

Question

Quizplus · Accepted Answer

The Answer of Vicky Payne sells beauty supplies.Her annual demand for a particular skin lotion is 7,000 units.The cost of placing an order is $10, while the holding cost per unit per year is 10 percent of the cost.This item currently costs $2.50 if the order quantity is less than 1500.For orders of 1501 units or more, the cost falls to $2.45.To minimize total cost, how many units should Vicky order each time she places an order? What is the minimum total cost?

Vicky Payne Sells Beauty Supplies