A local machine shop buys hex nuts at a cost of $0.15 each. There is a cost of $52 every time an order is placed and holding costs are based on a 20% annual interest rate.
If demand is expected to be 150 per month, what should the optimal order quantity be?
If the order is received all at one time?
If the order is received at 250 hex nuts per day (if we assume 20 days to a month)?