Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $119 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below. Rich Blue Chip's Price Structure Quantity Purchased Price/Unit 1-99 units $350 100-199 units $325- $300 200 or more units a) What is the most cost-effective order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips, using the data and discount choices provided, and using a fixed holding cost? The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a fixed holding cost) is units (enter your response as a whole number). At the chosen level of quantity discount, and using the fixed holding cost, what is the total annual cost for Bell computers to order, purchase, and hold the integrated chips : $ (round your response to the nearest whole number). b) Bell Computers wishes to recalculate using a 10% holding cost rather than the fixed $35 holding cost in part a. What is the most cost-effective order quantity, and what is the corresponding annual cost? The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a percentage-of-price holding cost) is units (enter your response as a whole number).
Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $119 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below. Rich Blue Chip's Price Structure Quantity Purchased Price/Unit 1-99 units $350 100-199 units $325- $300 200 or more units a) What is the most cost-effective order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips, using the data and discount choices provided, and using a fixed holding cost? The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a fixed holding cost) is units (enter your response as a whole number). At the chosen level of quantity discount, and using the fixed holding cost, what is the total annual cost for Bell computers to order, purchase, and hold the integrated chips : $ (round your response to the nearest whole number). b) Bell Computers wishes to recalculate using a 10% holding cost rather than the fixed $35 holding cost in part a. What is the most cost-effective order quantity, and what is the corresponding annual cost? The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a percentage-of-price holding cost) is units (enter your response as a whole number).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $119 per order, and sales are steady at
400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is
shown below.
Rich Blue Chip's Price Structure
Quantity Purchased
Price/Unit
1-99 units
$350
$325-
100-199 units
200 or more units
$300
a) What is the most cost-effective order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips, using the data
and discount choices provided, and using a fixed holding cost?
The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a fixed holding cost) is units (enter your response as a
whole number).
At the chosen level of quantity discount, and using the fixed holding cost, what is the total annual cost for Bell computers to order, purchase, and hold the
integrated chips : $ (round your response to the nearest whole number).
b) Bell Computers wishes to recalculate using a 10% holding cost rather than the fixed $35 holding cost in part a. What is the most cost-effective order quantity, and
what is the corresponding annual cost?
The most cost-effective order quantity (assuming they take the most cost-effective discount, and use a percentage-of-price holding cost) is
units (enter your
response as a whole number).
At the chosen level of quantity discount, and using the percentage-of-price holding cost, what is the total annual cost for Bell computers to order, purchase, and
hold the integrated chips : $ (round your response to the nearest whole number).
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