Question
Q)
A warehouse selling cement has to decide how often and in what quantities to reorder. It is cheaper, on average, to place large orders, because this reduces the ordering cost per unit. On the other hand, large orders mean higher storage costs. The warehouse always reorders cement in the same quantity, q. The total weekly cost, C, of ordering and storage is given by C = + 5a/q+3bq, where a, b are positive constants Does the term 5a/q represent the ordering cost or the storage cost? ordering cost storagecost Does the term 3bq rep resent the ordering cost or the storage cost? ordering cost storage cost What value of q gives the minimum total cost? Q =
Explanation / Answer
differentiate c with respect to q for minimum total cost. then q= sqrt(5a/3b)
