Zip Games Purchases Blank DVD Disks onto Which It Copies

question 16

Essay

Zip Games purchases blank DVD disks onto which it copies its software for sale through its mail order operation. A disk costs Zip $.20. Processing an order for more disks cost $15. Zip uses 60000 disks annually, and the company has a 25% cost of capital.
a.Find the optimal order quantity.
b.How many orders are placed annually?
c.How frequently will orders be placed?

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