A grocery store orders frozen pies in batches from a bakery and sells them in the grocery store. Storing one frozen pie for a year costs $0.25. When the grocery store reorders pies, there is a fixed cost of $5.25 per order as well as $0.75 per pie. Each year, they sell 4750 frozen pies.
What is the optimal number of pies to order in each order to minimize their total inventory costs.
What is the optimal number of pies to order in each order to minimize their total inventory costs.
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