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A pharmacist wants to establish an optimal inventory policy for a new antibiotic that requires refrigeration in storage. The pharmacist expects to sell 5400 packages
A pharmacist wants to establish an optimal inventory policy for a new antibiotic that requires refrigeration in storage. The pharmacist expects to sell 5400 packages of this antibiotic at a steady rate during the next year. She plans to place several orders of the same size spaced equally throughout the year. The ordering cost for each delivery is $18, and carrying costs, based on the average number of packages in inventory, amount to $6 per year for one package Use this information to answer the following questions. (a) Let x be the order quantity and r the number of orders placed during the year. Find the inventory cost (ordering cost plus carrying cost) in terms of x and r. C = 18r + 3x (b) Find the constraint function. 5400 = rx (Type an equation.) (c) Determine the economic order quantity that minimizes the inventory cost and then nd the minimum inventory cost. x= 180 C=$
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