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# Everett Mann's Dream Store sells waterbeds and supplies. The best selling bed in the store has an annual demand of 400 units.

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?

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