Assignment:
Demand for an item is constant at 100 units cost is $50, recorder cost is $40, and holding cost is $20 a year. Any demand which occurs when no stock is lost. The direct cost by lost sales is just ignored.
- What is the minimum selling price which makes it profitable to stock (order) the item?
- Suppose that the selling price if $55. What is the best option for the order quantity Q?
Provide complete and step by step solution for the question and show calculations and use formulas.