Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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10.

A grocery store sells boxes of cereal. The grocery store sells 48 boxes per day, assume 365 days per year. Boxes cost the store $1.00 each at wholesale costs: the
holding cost per item per year is estimated to be 12% of the wholesale cost to buy the goods. Each time the grocery store orders more boxes of cereal, they must pay
an addifional shipping and handling charge of $150. How many boxes of cereal should the company order in order to minimize their annual ordering and holding costs?
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Transcribed Image Text:A grocery store sells boxes of cereal. The grocery store sells 48 boxes per day, assume 365 days per year. Boxes cost the store $1.00 each at wholesale costs: the holding cost per item per year is estimated to be 12% of the wholesale cost to buy the goods. Each time the grocery store orders more boxes of cereal, they must pay an addifional shipping and handling charge of $150. How many boxes of cereal should the company order in order to minimize their annual ordering and holding costs?
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