Problem:
The new office supply discounter, Paper Clips, Etc. (PCE), sells a certain type of ergonomically correct office chair which costs $300. The annual holding cost rate is 40%, annual demand is 900, and the order cost is $20 per order. The lead time is 4 days. The store is open 300 days per year.
Required:
i) What is the optimal order quantity? Solve the numerical problem carefully and show all the steps.