Answer Happy

Part IV: The Jones family drinks a case of Sugary Pop every day of the year. Fortunately, a store in the next town offers discounts for quantity orders as shown in the table below, where the price for each category applies to every case purchased. Considering the cost of gasoline, Mr. Jones estimates that it costs him about $3 to go and pick up an order of Sugary Pop if he takes the family van, but it can only hold 40 cases of pop. If he orders more than that, he needs to rent a truck at a cost of $20. Mr. Jones does not have a lot of cash lying around, so the holding cost for the Sugary Pop will be the finance charge on his credit card which has an APR of 18%. Discount Category Quantity Purchased 1 1 to 99 2 100 to 399 3 400 or more Price (per case) $4.00 $3.92 $3.85 1.) Determine the optimal order quantity according to the EOQ model. What is the resulting (17 points) total cost per year? 2.) With this order quantity, how many orders need to be placed per year? What is the time interval between orders? [8 points)