Orders in Round Lots: Percona Corporation uses a direct material, Zelda. in its production processes. Thecompany uses
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Orders in Round Lots: Percona Corporation uses a direct material, Zelda. in its production processes. Thecompany uses 99,000 units of Zelda a year. The carrying costs of Zelda amount to $28.50 per unit, while order costs are $325 per order. The manufacturer of Zelda will only accept orders in lots of even thousands.
Required: What is the optimal order quantity and the annual inventory costs, given the restriction on order sizes?
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