00:01
Hi there, so for this problem we are told that a company needs 250 ,000 items per year.
00:10
Now it costs the company, so then we are having here some fits cost and that fits cost is 1200 and the variable cost for this is going to be 14 and now to produce each item.
00:35
Now if it also costs the company 1 .50 dollars per year for each item store, so the cost per year is 1 .50 dollars, so we need to find the number of items that should be produced in each rom so that the total cost of production and storage are minimized.
00:59
So then that total cost is going to be first the price per year, so that is 1 .50, then this times the number of items x divided by 2 because this is the average number of items, then this plus we have 1200 plus 14 times x and then this times 250 ,000 divided by x.
01:26
So now we just need to do this product in here, so then the cost function is equal to, so this gives us 3 divided by 4 times x, then this plus 300 million, then this divided by x and then this plus 3 ,500 ,000...