Each year, the Smalltown Optometry Clinic sells 10,000 frames for eyeglasses. The clinic orders frames from a

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Each year, the Smalltown Optometry Clinic sells 10,000 frames for eyeglasses. The clinic orders frames from a regional supplier, which charges $15 per frame. Each order incurs an ordering cost of $50. Smalltown Optometry believes that the demand for frames can be backlogged and that the cost of being short one frame for one year is $15 (because of loss of future business). The annual holding cost for inventory is 30¢ per dollar value of inventory. What is the optimal order quantity? What is the maximum shortage that will occur? What is the maximum inventory level that will occur?

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