Annual demand for an item is 2000 units, order cost is 10 and the annual holding cost is 40% of unit cost. Unit cost/quantity ordered is given below. What is the optimal order size? Quantity Unit price O to 499 1 500 to 999 0.8 1000 and over 0.6

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Annual demand for an item is 2000 units, order cost is 10 and the annual holding cost is 40% of unit cost. Unit cost/quantity
ordered is given below. What is the optimal order size?
Quantity
Unit price
O to 499
1
500 to 999
0.8
1000 and over
0.6
Transcribed Image Text:Annual demand for an item is 2000 units, order cost is 10 and the annual holding cost is 40% of unit cost. Unit cost/quantity ordered is given below. What is the optimal order size? Quantity Unit price O to 499 1 500 to 999 0.8 1000 and over 0.6
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