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18 August, 13:18

Ray's Satellite Emporium wishes to determine the best order size for its best-selling satellite dish (Model TS111). Ray has estimated the annual demand for this model at 1,174 units. His cost to carry one unit is $55 per year per unit, and he has estimated that each order costs $24 to place. How many should Ray order each time?

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  1. 18 August, 15:51
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    Ray should place 32 orders each time.

    Explanation:

    number Ray should order each time

    = sqrt (2*Annual Demand*Ordering Cost / Carrying cost per unit per annum)

    = sqrt (2*1,174*$24/$55)

    = 32

    Therefore, Ray should place 32 orders each time.
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