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A company orders $15,000 worth of goods every 6 months. They have identified that it costs $18 per year to store a single good in the warehouse. They also experience a fixed cost of ordering equivalent to $200 per order. After running their analysis to optimize this model, they reduced their ordering quantity to 169 per order. This resulted in a change to ordering every 2 months and reduced the total cost by $1600. Write down the equation you must optimize to find the optimal ordering quantity in this question and calculate the price (C) of one good

A company orders $15,000 worth of goods every 6 months. They have identified that it costs $18 per year to store a single good in the warehouse. They also experience a fixed cost of ordering equivalent to $200 per order. After running their analysis to optimize this model, they reduced their ordering quantity to 169 per order. This resulted in a change to ordering every 2 months and reduced the total cost by $1600. Write down the equation you must optimize to find the optimal ordering quantity in this question and calculate the price (C) of one good

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A company orders $15,000 worth of goods every 6 months. They have identified that it costs $18 per year to store a single good in the warehouse. They also experience a fixed cost of ordering equivalent to $200 per order. After running their analysis to optimize this model, they reduced their ordering quantity to 169 per order. This resulted in a change to ordering every 2 months and reduced the total cost by $1600. Write down the equation you must optimize to find the optimal ordering quantity in this question and calculate the price (C) of one good
Transcribed Image Text:A company orders $15,000 worth of goods every 6 months. They have identified that it costs $18 per year to store a single good in the warehouse. They also experience a fixed cost of ordering equivalent to $200 per order. After running their analysis to optimize this model, they reduced their ordering quantity to 169 per order. This resulted in a change to ordering every 2 months and reduced the total cost by $1600. Write down the equation you must optimize to find the optimal ordering quantity in this question and calculate the price (C) of one good
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