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14. (**) Dave's Sporting Goods sells Mountain Mouse freeze-dried meals. Dave's uses a continuous review system to manage meal inventories. Suppose Mountain Mouse offers the following volume discounts to its customers: 1-500 meals: $7 per meal 501 or more meals: $6.50 per meal Annual demand is 2,000 meals, and the cost to place an order is $15. Suppose the holding cost is $2 per meal per year. How many meals should Dave's order at a time? What are the total holding, ordering, and item costs associated with this quantity?

14. (**) Dave's Sporting Goods sells Mountain Mouse freeze-dried meals. Dave's uses a continuous review system to manage meal inventories. Suppose Mountain Mouse offers the following volume discounts to its customers: 1-500 meals: $7 per meal 501 or more meals: $6.50 per meal Annual demand is 2,000 meals, and the cost to place an order is $15. Suppose the holding cost is $2 per meal per year. How many meals should Dave's order at a time? What are the total holding, ordering, and item costs associated with this quantity?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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14. (**) Dave's Sporting Goods sells Mountain Mouse freeze-dried meals. Dave's uses a continuous review system to manage meal inventories. Suppose Mountain Mouse offers the following volume discounts to its customers: 1-500 meals: $7 per meal 501 or more meals: $6.50 per meal Annual demand is 2,000 meals, and the cost to place an order is $15. Suppose the holding cost is $2 per meal per year. How many meals should Dave's order at a time? What are the total holding, ordering, and item costs associated with this quantity?
Transcribed Image Text:14. (**) Dave's Sporting Goods sells Mountain Mouse freeze-dried meals. Dave's uses a continuous review system to manage meal inventories. Suppose Mountain Mouse offers the following volume discounts to its customers: 1-500 meals: $7 per meal 501 or more meals: $6.50 per meal Annual demand is 2,000 meals, and the cost to place an order is $15. Suppose the holding cost is $2 per meal per year. How many meals should Dave's order at a time? What are the total holding, ordering, and item costs associated with this quantity?
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