Question: A firm uses 1,400 units per year of component G. Each order costs £350 to make and average storage costs per unit of G are £20. There is also an extra ‘capacity' cost given that the firm has to provide warehousing capable of storing a full order size of q even though this warehousing space will be underutilized most of the time. This ‘capacity' cost will be £15 per unit of G. Adapt the optimal order size formula to include this extra cost and then find the optimal order size for this firm.