A fresh food company in Oman is specialized in apples distribution in Oman. Annual sales forecast is 4800 boxes of apple. It costs OR 50 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities (in boxes) from 1 to 199 at a unit price RO 5; quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then the best order quantity that minimizes the total annual inventory cost is O a. None is correct Оb. 200 О с. 199 O d. 371 O e. 500

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
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Afresh food company in Oman is specialized in apples distribution in Oman. Annual sales forecast is 4800 boxes of
apple. It costs OR 50 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on
quantities purchased such that the order quantities (in boxes) from 1 to 199 at a unit price RO 5; quantity 200 to 499
at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then
the best order quantity that minimizes the total annual inventory cost is
O a.
None is correct
O b. 200
O c. 199
O d. 371
O e. 500
Transcribed Image Text:Afresh food company in Oman is specialized in apples distribution in Oman. Annual sales forecast is 4800 boxes of apple. It costs OR 50 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities (in boxes) from 1 to 199 at a unit price RO 5; quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then the best order quantity that minimizes the total annual inventory cost is O a. None is correct O b. 200 O c. 199 O d. 371 O e. 500
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