K The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer. > For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece. >If she orders 2,001 to 5,000 pieces, the price drops to $1.60/piece. > 5,001 to 10,000 pieces brings the price to $1.40/piece, and > 10,001 and above reduces the price to $1.25/piece. Lisa's order costs are $195 per order, her annual holding costs are 5%, and the annual demand is 48,400 pieces. For the best option (the best option is the price level that results in an EOQ within the acceptable range): a) What is the optimum ordering quantity? units (round your response to the nearest whole number).

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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The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every
week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives.
She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her
vendor will offer.
> For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece.
>If she orders 2,001 to 5,000 pieces, the price drops to $1.60/piece.
>5,001 to 10,000 pieces brings the price to $1.40/piece, and
> 10,001 and above reduces the price to $1.25/piece.
Lisa's order costs are $195 per order, her annual holding costs are 5%, and the annual demand is 48,400 pieces. For
the best option (the best option is the price level that results in an EOQ within the acceptable range):
a) What is the optimum ordering quantity?units (round your response to the nearest whole number).
Transcribed Image Text:K The catering manager of LaVista Hotel, Lisa Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday night, when her crew tried to set up for a banquet for 500 people, they did not have enough knives. She decides she needs to order some more silverware, but wants to take advantage of any quantity discounts her vendor will offer. > For a small order (2,000 pieces or less) her vendor quotes a price of $1.80/piece. >If she orders 2,001 to 5,000 pieces, the price drops to $1.60/piece. >5,001 to 10,000 pieces brings the price to $1.40/piece, and > 10,001 and above reduces the price to $1.25/piece. Lisa's order costs are $195 per order, her annual holding costs are 5%, and the annual demand is 48,400 pieces. For the best option (the best option is the price level that results in an EOQ within the acceptable range): a) What is the optimum ordering quantity?units (round your response to the nearest whole number).
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