Write expression for inventory cost

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Reference no: EM13844610

A company expects to sell D units of a certain product per year. Sales are assumed to be at a steady rate with no shortages allowed. Each time an order for the product is placed, an ordering cost of K dollars is incurred. Each item costs p dollars, and the holding cost is h dollars per item per year. The order quantity (the number of items in each order) is x > 0.

a) Write expression for inventory cost (combined ordering cost, purchasing cost, holding cost) C(x)=

b) What equation holds when the inventory cost is minimized? This quantity is called the economic order quantity (EOQ) x=?

Reference no: EM13844610

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