Amanufacturer of hospital supplies has a uniform annual demand for 320 comma 000 boxes of bandages. it costs $10 to store one box of bandages for one year and $ 160 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?

100 times per year

Explanation:

Data provided in the question:

Annual Demand , D = 320,000 boxes

Cost of storing one box, C = $10

Plant set up cost for production, c = $160

Now,

The optimal ordering quantity =

or

The optimal ordering quantity =

or

= 3200

Therefore,

Number of timer in year company produce boxes =

=

= 100 times per year

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