Math Problem Statement
Suppose that in the inventory problem, the storage cost depends on the maximum inventory size, rather than the average. In this case, the number of units that should be ordered or manufactured to minimize the total cost is qequalsStartRoot StartFraction fM Over k EndFraction EndRoot . A book publisher wants to know how many times a year a print run should be scheduled. Suppose it costs $1200 to set up the printing process, and the subsequent cost per book is so low it can be ignored. Suppose further that the annual warehouse cost is $4 times the maximum number of books stored. Assuming 5600 copies of the book are needed per year, how many books should be printed in each print run?
Solution
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Math Problem Analysis
Mathematical Concepts
Inventory Management
Optimization
Algebra
Formulas
q^* = \sqrt{\frac{2 \cdot f \cdot M}{k}} (Economic Order Quantity model with storage costs based on maximum inventory)
Theorems
Economic Order Quantity (EOQ) Model
Suitable Grade Level
College Level / Advanced High School
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