Paula Perkins, the owner of Paula's Perfume Shoppe, expects to sell 600 bottles of a certain brand of perfume this year. The perfume costs $25 per bottle, the ordering fee is $10 per shipment, and the cost of storing the perfume is 30 cents per bottle per year. The perfume is sold at a constant rate throughout the year, and each shipment arrives just as the preceding shipment is being used up. Part 1 a. How many bottles should Paula order in each shipment to minimize total cost? Paula should order 200 bottles in each shipment to minimize the total cost. Part 2 out of 2 b. How often should Paula order the perfume? Paula should order the perfume [ ] times per year.
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Calculate the total cost of ordering and storing the perfume for the year: = SlO + (325 x 4) + (5430 x 12) = $1,890 Show more…
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