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# Determine the expression for Optimum Order Quantity

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1)The total relevant cost (TRC) of holding inventory in a production facility is given by:

TRC = (A/Q)(B) + C(Q/2)+D

Where:
Q = order quantity,
A, B, C, D = constants

a)(10 pts) Determine the expression for the optimum order quantity (Q*) based upon the minimum TRC,
b)(5 pts) Prove that the expression in part 'a" is the minimum TRC,
c)(10 pts) If A, B, C, D = 10, 20, 30, 40, respectively, calculate the optimal Q, indicated as (Q*), for minimum TRC,
d)(10 pts) If A, B, C, D = 10, 20, 30, 40, respectively, calculate the minimum cost (TRC*).

Complete the table below with your answers, show work below or on separate sheet
(Please see the attached file).

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#### Solution Summary

The expert determines the expression for optimum order quantity. A complete, neat and step-by-step solution is provided in the attached file.

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