Stat 001 Practice exam questions (II)

1. A company has determined that their costs of ordering and storing goods in inventory is well approximated by the function:

$$c(x) = 0.001 x + \frac{1000}{x}$$

, where x is the number of units ordered (x > 0).

(a) 10. Sketch a graph of this function, noting any important features.

(b) 5. Sketch a graph of the first derivative of the function. Is the first derivative ever equal to zero?

(c) 5. Describe, in plain English, the relationship to a co-worker.