Everett Mann's Dream Store Sells Waterbeds and Supplies

Essay

Everett Mann's Dream Store sells waterbeds and supplies.The best-selling bed in the store has an annual demand of 400 units.The ordering cost is $40, while the holding cost is $5 per unit per year.There are 250 working days per year, and the lead-time is 6 days.
(a)To minimize 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 the optimal order quantity be?