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Calculate optimal order quantity based on the quantity discount information.

Calculate optimal order quantity based on the quantity discount information.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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  1. Calculate optimal order quantity based on the quantity discount information. 
IGOT7 Store purchases shirts printed with GOT7 name and logo from a vendor. The vendor sells the shirts to the store for RM40 each. The cost to the store for placing an order is RM110, and the annual carrying cost is 20% of the cost of the shirt. Jackson, the store manager, estimates that 1,600 shirts will be sold during the year. The vendor has offered the store the following volume discount in Table 2. Order Size 1 - 299 300 - 500 501 and more Table 2: Discount schedule Discount 0% 2% 4% Cost/Price RM40.00 RM39.20 RM38.40
Transcribed Image Text:IGOT7 Store purchases shirts printed with GOT7 name and logo from a vendor. The vendor sells the shirts to the store for RM40 each. The cost to the store for placing an order is RM110, and the annual carrying cost is 20% of the cost of the shirt. Jackson, the store manager, estimates that 1,600 shirts will be sold during the year. The vendor has offered the store the following volume discount in Table 2. Order Size 1 - 299 300 - 500 501 and more Table 2: Discount schedule Discount 0% 2% 4% Cost/Price RM40.00 RM39.20 RM38.40
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