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
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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F104c5ce4-13f0-404b-9b3b-9f80206c3e77%2Fc80ea89f-980f-4f65-bb3a-afdf0570ea8a%2F610g0u_processed.png&w=3840&q=75)
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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