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Matthew Liotine's Dream Store sells beds and assorted supplies. His best-selling bed has an annual demand of cont'd 400 units. Ordering cost is $40; holding cost is $5 per unit per year.
a) To minimize the total cost, how many units should be ordered each time an order is placed?
b) If the holding cost per unit was $6 instead of $5, what would be the optimal order quantity?
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