What is the optimal order frequency

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Sara’s Deli is famous for their delicious cupcakes and Sara purchases the cupcakes from a local bakery. The demand for the cupcakes is 400 per month. A cupcake costs Sara $5 to purchase from the bakery, and the inventory holding cost is for Sara 15%. Sarah also needs to pay a preparation cost of $20 per order. What is the optimal order quantity for Sara’s? And what is the optimal order frequency?

Reference no: EM13994169

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