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2. (Quantity Discount) County Hospital orders syringes from a hospital supply firm. The hospital expects to use 40,000 per year. The cost to order and have the syringes delivered is $800. The annual carrying cost is $1.90 per syringe because of security and theft. The hospital supply firm offers the following quantity discount pricing schedule. Qty 0-9,999 10,000-19,999 20,000-29,999 30,000-39,999 40,000-49,999 50,000+ Price $ 3.40 $ 3.20 $ 3.00 $ 2.80 $ 2.60 $ 2.40 What is best order quantity for syringes that minimize total cost?

2. (Quantity Discount) County Hospital orders syringes from a hospital supply firm. The hospital expects to use 40,000 per year. The cost to order and have the syringes delivered is $800. The annual carrying cost is $1.90 per syringe because of security and theft. The hospital supply firm offers the following quantity discount pricing schedule. Qty 0-9,999 10,000-19,999 20,000-29,999 30,000-39,999 40,000-49,999 50,000+ Price $ 3.40 $ 3.20 $ 3.00 $ 2.80 $ 2.60 $ 2.40 What is best order quantity for syringes that minimize total cost?

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
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**Quantity Discount Analysis for Syringe Procurement** County Hospital orders syringes from a hospital supply firm, with an expected usage of 40,000 syringes per year. The ordering and delivery cost for these syringes is $800. Additionally, due to security and theft concerns, the annual carrying cost is $1.90 per syringe. The hospital supply firm provides a quantity discount pricing schedule as follows: | Quantity | Price per Syringe | |-----------------|-------------------| | 0-9,999 | $3.40 | | 10,000-19,999 | $3.20 | | 20,000-29,999 | $3.00 | | 30,000-39,999 | $2.80 | | 40,000-49,999 | $2.60 | | 50,000+ | $2.40 | **Objective:** Determine the optimal order quantity for syringes to minimize the total cost. This analysis will help the hospital in strategizing the procurement of syringes by leveraging the discounts on bulk purchases, thereby optimizing costs effectively.
Transcribed Image Text:**Quantity Discount Analysis for Syringe Procurement** County Hospital orders syringes from a hospital supply firm, with an expected usage of 40,000 syringes per year. The ordering and delivery cost for these syringes is $800. Additionally, due to security and theft concerns, the annual carrying cost is $1.90 per syringe. The hospital supply firm provides a quantity discount pricing schedule as follows: | Quantity | Price per Syringe | |-----------------|-------------------| | 0-9,999 | $3.40 | | 10,000-19,999 | $3.20 | | 20,000-29,999 | $3.00 | | 30,000-39,999 | $2.80 | | 40,000-49,999 | $2.60 | | 50,000+ | $2.40 | **Objective:** Determine the optimal order quantity for syringes to minimize the total cost. This analysis will help the hospital in strategizing the procurement of syringes by leveraging the discounts on bulk purchases, thereby optimizing costs effectively.
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