The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are D = 600 units, S =
Posted: Fri May 20, 2022 9:13 am
The annual demand, ordering cost, and the annual inventory
carrying cost rate for a certain item are D = 600 units, S =
$20/order and I = 30% of item price. Price is established by the
following quantity discount schedule. What should the order
quantity be in order to minimize the total annual cost?
Quantity
1 to 49
50 to 249
250 and up
Price
$5.00 per unit
$4.50 per unit
$4.10 per unit
Questions:
1) What is the optimal order quantity, given the following price
breaks for purchasing the item?
2) What is the total annual cost at the optimal behavior? What’s
is your recommendation?
carrying cost rate for a certain item are D = 600 units, S =
$20/order and I = 30% of item price. Price is established by the
following quantity discount schedule. What should the order
quantity be in order to minimize the total annual cost?
Quantity
1 to 49
50 to 249
250 and up
Price
$5.00 per unit
$4.50 per unit
$4.10 per unit
Questions:
1) What is the optimal order quantity, given the following price
breaks for purchasing the item?
2) What is the total annual cost at the optimal behavior? What’s
is your recommendation?