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Emma Turner manages a bookstore and has determined that the annual demand for a popular novel is 25,000 copies. Emma handles the book purchasing decisions
Emma Turner manages a bookstore and has determined that the annual demand for a popular novel is 25,000 copies. Emma handles the book purchasing decisions and aims to minimize inventory costs. She estimates that each time an order is placed, it costs $15, covering order processing and related expenses. Additionally, she calculates that holding one copy of the novel in inventory for a year costs approximately 2 cents due to storage and other factors. The demand for the novel is evenly distributed throughout the year, and it takes about 5 working days for an order to arrive once it's placed. The bookstore sells, on average, 100 copies of the novel every day. Emma believes that by ordering at the right time, she can avoid stockouts completely. a. What should be the optimal order quantity for the novel to minimize total inventory cost
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