Problem 805

 

A manufacturer of hospital supplies has a uniform annual demand for 500000 boxes of bandages. It costs $10 to store one box of bandages for one year and $250 to set up the plant for production. How many times a year should the company produce boxes of bandages in order to minimize the total storage and setup costs?

 

Solution:-

 

The company should produces boxes of bandages 100 times(s) a year.

 

 

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