Minimizes average inventory


A biomedical instrumentation company sells its major products at the rate of 5 units for each day. The instrument is manufactured in lots every few days. It cost company $2000 to set up production of the lot and $40 per unit for each day to hold finished instruments in inventory between runs. The company would like to select a lot size which minimizes average inventory and set up costs for each day supposing that demand takes place smoothly at the given rate. Formulate and solve this problem as LP.

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Mathematics: Minimizes average inventory
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