Answer to Question #8900 in Microeconomics for nabila

Question

Patterson Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 250 units, and this is constant throughout the year. Carrying cost is estimated to be $1 per unit per year and the ordering cost is $20 per order.

How many orders per year are needed with the optimal policy?