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Suppose a large family consumes eggs at a stable rate of 5 cartons per month. The cost of each shopping trip is $2. The cost of holding one carton of eggs is $0,20/carton/month. How many cartons of eggs should the family buy each time to minimize the cost of inventory of eggs while having enough to consume per month

Respuesta :

Answer:

10 cartons

Explanation:

Shopping trip = $2

Holding cost per carton per month = $0.2

Demand (monthly) = 5 cortons per month

When family buy 10 cartons /month

Total cost = $2 (trip cost) + $0.2x10 (1st month inventory holding cost) +0.2x5 (2nd month inventory holding cost) = $5

When family buy 5 cartons/month

Total cost for 2 months = $2 + $0.2 x 5 + $2 + $0.2 x 5 = $6

Buying 10 cartons is $1 cheaper than buying 5 cartons for 2 months

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