Question
A retailer estimates her unit cost to place an order (S) at $1,000 (+ if it appears a comma, interpret it as a thousand separator).
A retailer estimates her unit cost to place an order (S) at $1,000 (+ if it appears a comma, interpret it as a thousand separator). Currently, she orders in optimal quantities of 400 units. However, she has heard about the benefits of just-in-time purchasing, a principle that advocates buying goods in smaller lots as a way to reduce average inventory and storage costs.
If it ordered in smaller lots, it would have to place more orders to support demand and thus reduce its value of S. What should the new S be if an optimal order size of 50 units was targeted. Round the final answer to 2 decimal places.
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