Question

A restaurant has an annual demand for 882 bottles of California wine. It costs $1 to store 1 bottle for 1​ year, and it costs ​$6 to place a reorder. Find the optimum number of bottles per order.

Answer 1

Answer:

73 bottles

Explanation:

Let x = total number of orders

C(x) indicates number of orders and the cost of storage

Thus,

6$ dollar to place a reorder  

So,

C(x)= 1(882/x)+6x = 882/x+6x

C'(x)=-882/x^2+6=0

6=882/x^2.

Thus,

x^2=882/6

Which indicates 882/12=73 bottles of wine per order

Thus C (12)=1*73+6*12=$145 per year

The best possible number of bottles per order = 73 bottles