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6. Wang Distributors has an annual demand for an airport metal detector of 1,000 units. The cost of a typical detector to Wang is $50. Carrying cost is estimated to be 25% of the unit cost, and the ordering cost is $40 per order. If Ping Wang, the owner, orders in quantities of 200 or more, he can get a 3% discount on the cost of the detectors. Should Wang take the quantity discount?

6. Wang Distributors has an annual demand for an airport metal detector of 1,000 units. The cost of a typical detector to Wang is $50. Carrying cost is estimated to be 25% of the unit cost, and the ordering cost is $40 per order. If Ping Wang, the owner, orders in quantities of 200 or more, he can get a 3% discount on the cost of the detectors. Should Wang take the quantity discount?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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6. Wang Distributors has an annual demand for an airport metal detector of 1,000 units. The cost of a typical detector to Wang is $50. Carrying cost is estimated to be 25% of the unit cost, and the ordering cost is $40 per order. If Ping Wang, the owner, orders in quantities of 200 or more, he can get a 3% discount on the cost of the detectors. Should Wang take the quantity discount?
Transcribed Image Text:6. Wang Distributors has an annual demand for an airport metal detector of 1,000 units. The cost of a typical detector to Wang is $50. Carrying cost is estimated to be 25% of the unit cost, and the ordering cost is $40 per order. If Ping Wang, the owner, orders in quantities of 200 or more, he can get a 3% discount on the cost of the detectors. Should Wang take the quantity discount?
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