## A company produces and sells 211,600 boxes of t-shirts each year. Each production run has a fixed cost of $400 and an additional cost of $3

Question

A company produces and sells 211,600 boxes of t-shirts each year. Each production run has a fixed cost of $400 and an additional cost of $3 per box of t-shirts. To store a box for a full year costs $2. What is the optimal number of production runs the company should make each year? Do not include units with your answer.

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Math
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2021-10-10T20:37:49+00:00
2021-10-10T20:37:49+00:00 1 Answer
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## Answers ( )

Answer:Step-by-step explanation:Given

Company Produces and sells 211600 boxes of T-shirt each year

Fixed cost =$ 400

Additional cost = $ 3 per box

storage cost =$ 2

let x be the no of production run

therefore

Holding cost per year

yearly ordering cost

Total cost C(x)

differentiate C(x) w.r.t to x we get

Put to get max/min value

therefore 46 runs must be performed