The campus bookstore sells​ 4,000 sets of graduation regalia each year. Placing an order from their supplier costs​ $25 regardless of order​ quantity, so they usually place a large order​ (a half​ year's supply) at a time. It costs​ $5 per year to hold a cap and gown in​ inventory, primarily insurance costs for the highly flammable material. What is the difference in the total cost if they order at their optimal order quantity compared to their current​ policy?

Q&A Education