Example: Using Money Units
Determine the optimal order weight of a material when you know the annual demand.
1. Define the total weight of material needed each year.
2. Define the cost to place an order.
Unlike other dimensions, currency consists of only one unit, the base currency. This base currency is represented by the currency character.
3. Define the cost per unit weight.
4. Define the cost of keeping material in the inventory.
5. Define the total annual cost as a function of the order weight assuming that the average weight in stock is half the order weight.
6. Use the minimize function inside a solve block to minimize the total cost function. Define the guess value for the optimal order weight to be 5 kg.
7. Calculate the minimum value for the total annual cost.
