A mail-order house uses 15,480 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Number of Boxes Price per Box 1,000 to 1,999 $1.25 2,000 to 4,999 $1.20 5,000 to 9,999 $1.15 10,000 or more $1.10 A. Determine the optimal order quantity. B. Determine the number of orders per year.

A mail-order house uses 15,480 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Number of Boxes Price per Box 1,000 to 1,999 $1.25 2,000 to 4,999 $1.20 5,000 to 9,999 $1.15 10,000 or more $1.10 A. Determine the optimal order quantity. B. Determine the number of orders per year.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...

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