Question

A company needs 510,000 items per year. It costs the company $850 to prepare a production run of these items and $9 to produce each item. If it also costs the company $0.75 per year for each item stored, find the number of items that should be produced in each run so that total costs of production and storage are minimized. 33995 Incorrect: Your answer is incorrect. items/run

Answer 1

Answer:

20,824 units

Explanation:

850x + [ 0.75 - 510,000 ] / x

solving the equation we get,

$x^{2}$ = [ 0.75 - 510,000 ] / 850

x = 24.49

The number of items produced in each run should be;

510,000 / 24.49 = 20,824