How to minimize total ordering and inventory holding cost


Problem:

KU School of Business estimates that the school building will require 50 cans of disinfecting wipes per week for the foreseeable future. To ensure safety of the student and staff, they have instituted a strict policy of never running out of wipes. The school buys each can at a retail price of $10, besides which, the supplier charges a fixed fee of $50 per order irrespective of the order size. Since disinfecting wipes dry out very fast, the school estimates a holding cost of 0.20% of the retail price per can per week.

Question: How many cans should the school buy in each order to minimize the total ordering and inventory holding cost? If your answer is not an integer, provide at least three decimal places, e.g., 7.500.

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Supply Chain Management: How to minimize total ordering and inventory holding cost
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