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Jenny sells beauty supplies. Her annual demand for a particular skin lotion is 2,000 units. The cost of placing an order is $200, while the holding cost per unit per year is 20% of the cost. This item currently costs $50 if the order quantity is less than 100. For orders between 100-399 units, the unit cost falls to $49. For orders of 400 units or more, the unit cost falls to $48.

To minimize total inventory cost:

(1) How many units should Jenny order each time she placed an order?

(2) What is the minimum annual total cost?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93115430

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