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Use the same stated cost assumptions
The modeled annual relevant cost is (10,000/Q)×50 + (Q/2)×2. Purchase price, safety stock and shortages are omitted from this comparison.
Evaluate selected feasible quantities
| Q | Annual relevant cost |
|---|---|
| 600 | 1,433.3333 |
| 707 | 1,414.2136 |
| 708 | 1,414.2147 |
| 800 | 1,425 |
Distinguish the continuous optimum
At the exact continuous quantity, annual ordering and holding costs are each approximately 707.1068, giving relevant cost approximately 1,414.2136. Integer quantities and pack constraints need their own objective comparisons.
Keep an operating decision broader than the cost curve
Lead time, uncertain demand, storage limits and supplier conditions can change feasibility. The table is a model exercise, not an instruction to place an order.