Suppose That a Company Needs 800 Items During a Year

question 88

Multiple Choice

Suppose that a company needs 800 items during a year and that preparation for each production run costs $60. Suppose further that it costs $8 to produce each item and $0.45 to store an item for one year. Use the inventory cost model to find the number of items in each production run that will minimize the total costs of production and storage. ​

• A)449 items
• B)462 items
• C)491 items
• D)480 items
• E)469 items

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Definitions:

Denominator

In a fraction, the number below the line.

Fraction

A mathematical expression representing the division of one quantity by another, indicating parts of a whole.

Higher Terms

Advanced conditions or clauses within an agreement or contract that specify more stringent requirements or higher levels of performance.

Denominator

The bottom number in a fraction, representing the total number of equal parts the whole is divided into.