3C store managers want an optimal inventory policy.
Overstocking results in excessive storage and interest costs,
whereas a small inventory means added costs for reordering and delivery.
A manager estimates that a total of 1500 cases of LCD TV will be sold at
a steady rate during the coming year and it costs $5 to store a case for
a year.
He can place several orders per year and he also estimates that the
handling cost for each delivery is $100.
What is the optimal reorder quantity that minimizes total inventory costs?
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