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4. A mail-order house uses 18,000 boxes a year. Carrying costs are $.60 per box per year and ordering costs are $96. The following price schedule is offered. Determine the EOQ and the # of orders per year. # Boxes Unit Price 1000-1999 $1.25 2000-4999 $1.20 5000-9999 $1.15 10000+ $1.10 a. What is the order quantity following the EOQ model? b. Considering the quantity discount, would the economic order quantity be changed? c. Supposed that the holding cost is 48% of the price, what is the optimal order quantity?

4. A mail-order house uses 18,000 boxes a year. Carrying costs are $.60 per box per year and ordering costs are $96. The following price schedule is offered. Determine the EOQ and the # of orders per year. # Boxes Unit Price 1000-1999 $1.25 2000-4999 $1.20 5000-9999 $1.15 10000+ $1.10 a. What is the order quantity following the EOQ model? b. Considering the quantity discount, would the economic order quantity be changed? c. Supposed that the holding cost is 48% of the price, what is the optimal order 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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4. A mail-order house uses 18,000 boxes a year. Carrying costs are $.60 per box per year and ordering costs are $96. The following price schedule is offered. Determine the EOQ and the # of orders per year. # Boxes Unit Price 1000-1999 $1.25 2000-4999 $1.20 5000-9999 $1.15 10000+ $1.10 a. What is the order quantity following the EOQ model? b. Considering the quantity discount, would the economic order quantity be changed? c. Supposed that the holding cost is 48% of the price, what is the optimal order quantity?
Transcribed Image Text:4. A mail-order house uses 18,000 boxes a year. Carrying costs are $.60 per box per year and ordering costs are $96. The following price schedule is offered. Determine the EOQ and the # of orders per year. # Boxes Unit Price 1000-1999 $1.25 2000-4999 $1.20 5000-9999 $1.15 10000+ $1.10 a. What is the order quantity following the EOQ model? b. Considering the quantity discount, would the economic order quantity be changed? c. Supposed that the holding cost is 48% of the price, what is the optimal order quantity?
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