How many units should be ordered time an order is place, Finance Basics

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How many units should be ordered time an order is place

Assignment:

Madeline Thimmes's Dream Store sells waterbeds and assorted supplies. Her best-selling bed has an annual demand of 400 units. Ordering cost is $40; holding cost is $5 per unit per year.

a. To minimize the total cost, how many units should be ordered each time an order is placed?

b. If the holding cost per unit was $6 instead of $5, what would be optimal order quantity?

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