CU Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price break and other data for the problem. Price copper $ .81 per pound up to 2,499 pounds .80 2,500-4,999 pounds .78 5,000 pound or greater Annual demand 51,000 pounds per year Holding cost 30 % per unit/yr. Of the price of copper Ordering cost $ 30 Which quantity should be ordered?
CU Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price break and other data for the problem.
Price copper $ .81 per pound up to 2,499 pounds
.80 2,500-4,999 pounds
.78 5,000 pound or greater
Annual demand 51,000 pounds per year
Holding cost 30 % per unit/yr. Of the price of copper
Ordering cost $ 30
Which quantity should be ordered?
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