Question
A retail appliance store sells 4,000 television sets each year. It costs $8 to store one television set for a year. To reorder, there is
A retail appliance store sells 4,000 television sets each year. It costs $8 to store one television set for a year. To reorder, there is a fixed processing cost of $25, plus a $7.5shipping fee for each television set. (a) The cost function, in dollars, expressed as a function of
x
, the number of television sets the store reorders each time (
x
is also the lot size the store must maintain), is
C(x)=
, where
x
is defined between and . (b) To minimize its cost, the lot size the store maintains should be television sets, and the store should place orders each year. (Your answers should be integers. )
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