A pharmacist wants to establish an optimal inventory policy for a new antibiotic that requires refrigeration in storage. The pharmacist expects to sell 2400 packages of this antibiotic at a steady rate during the next year. She plans to place several orders of the same size spaced equally throughout the year. The ordering cost for each delivery is $12, and carrying costs, based on the average number of packages in inventory, amount to $4 per year for one package. Use this information to answer the following questions. a) Let x be the order quantity and r the number of orders placed during the year. Find the inventory cost (ordering cost plus carrying cost) in terms of x and r. b) Find the constraint function. c) Determine the economic order quantity that minimizes the inventory cost and then find the minimum inventory cost. X=__________ C=$__________
A pharmacist wants to establish an optimal inventory policy for a new antibiotic that requires refrigeration in storage. The pharmacist expects to sell 2400 packages of this antibiotic at a steady rate during the next year. She plans to place several orders of the same size spaced equally throughout the year. The ordering cost for each delivery is $12, and carrying costs, based on the average number of packages in inventory, amount to $4 per year for one package. Use this information to answer the following questions.
a) Let x be the order quantity and r the number of orders placed during the year. Find the inventory cost (ordering cost plus carrying cost) in terms of x and r.
b) Find the constraint function.
c) Determine the economic order quantity that minimizes the inventory cost and then find the minimum inventory cost. X=__________ C=$___________
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