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Part 1: Optimal Order Quantity Robert Baker is running a pharmacy in Nigeria (where Naira is the local currency). His recent experience in the MicroMasters

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Part 1: Optimal Order Quantity Robert Baker is running a pharmacy in Nigeria (where Naira is the local currency). His recent experience in the MicroMasters course motivated him to rethink how to reorder pharmaceuticals to replenish inventory. He recalls from Module 4, Unit 1, Video 5, that he should consider the purchase cost, the order cost, and the holding cost. In the past, Joshua rigorously tracked these cost items. For Ibuprofen he knows that: unit cost: c=155 Naira/pack demand: D=710 packs/year ordering cost: A=1500 Naira/order holding cost: rc=48 Naira/pack pear How many packs of Ibuprofen should Joshua order to minimize the total cost? Round answer to the nearest integer. Part 2: Consolidating orders Robert runs a second pharmacy on the other side of town. He has been ordering for each location individually from a wholesaler. He realizes that he can save some money by consolidating the two orders into one single order. The costs per pack for both pharmacies are exactly the same (use A, c and rc values from Part 1). The annual demand for Ibuprofen in the second pharmacy is 990 packs. What is the consolidated optimal order quantity (in packs of Ibuprofen)? Round answer to the nearest integer. Part 3: Savings from consolidation If Robert places one consolidated order (as in Part 2) instead of placing two separate orders, how much money will he save? Round answer to one decimal place (e.g. if the result is 1.534 put in as an answer 1.5)

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