Mathematics
Mathematics, 26.02.2021 14:00, jinn53

Joshua is running a pharmacy in Nigeria (where Naira is the local currency). His recent experience in the MicroMasters course motivated him to rethink how to reorder pharmaceuticals to replenish inventory. He recalls from Module 4, Unit 1, Video 5, that he should consider the purchase cost, the order cost, and the holding cost. In the past, Joshua rigorously tracked these cost items. For Ibuprofen he knows that: unit cost: c = 175 Naira/pack

demand: D = 690 packs/year

ordering cost: A = 2000 Naira/order

holding cost: r∗c = 42 Naira/pack*year

How many packs of Ibuprofen should Joshua order to minimize the total cost?

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