example-5

size that will minimize the total cost. Here is an example of how such a problem may be solved using calculus. EXAMPLE 5 Modeling Problem: Managing inventory to minimize cost A retailer buys 6,000 calculator batteries a year from a distributor and is trying to decide how often to order the batteries. The ordering fee is $20 per shipment, the stor- age cost is $0.96 per battery per year, and each battery costs the retailer $0.25. Suppose that the batteries are sold at a constant rate throughout the year and that each shipment arrives uniformly throughout the year just as the preceding shipment has How many batteries should the retailer order each time to minimize the total cost? been used up