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    Optimal Quantity of Widgets

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    A firm sells 25,000 widgets annually that it purchases from a widget supplier for
    $10 each. It costs the firm $62.50 in administrative costs to place an order for the
    widgets and, on the average, costs $0.50 in carrying costs to maintain a widget in
    inventory. What is the optimal quantity of widgets to be purchased in each order
    from the widget supplier?

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    https://brainmass.com/business/accounting/optimal-quantity-widgets-148552

    Solution Preview

    A firm sells 25,000 widgets annually that it purchases from a widget supplier for
    $10 each. It costs the firm $62.50 in administrative costs to ...

    Solution Summary

    This solution is comprised of a detailed explanation to answer what is the optimal quantity of widgets to be purchased in each order from the widget supplier.

    $2.49

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