1. Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 263 units. This model costs Ray $176 to purchase from his supplier. His annual cost to carry inventory is 24% and he estimates that orders cost $26 to process. What is the optimal order quantity?
2. A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier charges $19 per stone, annual carrying costs are 13%, and the cost of processing orders is $32. The jewelry firm operates 250 days per year and their usage rate is 67 stones per day. What is the annual cost of holding precious stones in inventory?