Statement of a problem № m1304


Blair H. Dodds, III, runs a medium-to-large-sized home eBay business dealing in vintage photographs. The annual demand for his photos is approximately 50,000. The annual overhead cost (excluding the purchase price) to buy the photographs is $ 4,000 per year. Given that this cost represents the optimal annual ordering cost and the optimal ordering quantity is 400 photographs at a time determine the ordering cost and the average inventory level.

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