offer price concessions in order to attract larger orders. The price structure is shown below. a) What is the optimal order quantity and the minimum cost for Bell Computers to order, purchase, and hold these integrated chips? Rich Blue Chip's Price Structure Quantity Purchased Price/Unit $350 $325 $300 1-99 units 100-199 units 200 or more units b) Bell Computers wishes to use a 10% holding cost rather than the fixed $35 holding cost in part a. What is the optimal order quan- tity, and what is the optimal cost?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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12.20 Bel Computers purchases integrated chips at $350 per
chip. The holding cost is $35 per unit per year, the ordering cost is
$120 per order, and sales are steady, at 400 per month. The com-
pany's supplier, Rich Blue Chip Manufacturing, Inc., decides to
Transcribed Image Text:12.20 Bel Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $120 per order, and sales are steady, at 400 per month. The com- pany's supplier, Rich Blue Chip Manufacturing, Inc., decides to
offer price concessions in order to attract larger orders. The price
structure is shown below.
a) What is the optimal order quantity and the minimum cost for Bell
Computers to order, purchase, and hoid these integrated chips?
Rich Blue Chip's Price Structure
Quantity Purchased
Price/Unit
$350
$325
$300
1-99 units
100-199 units
200 or more units
b) Bell Computers wishes to use a 10% holding cost rather than the
fixed $35 holding cost in part a. What is the optimal order quan-
tity, and what is the optimal cost?
Transcribed Image Text:offer price concessions in order to attract larger orders. The price structure is shown below. a) What is the optimal order quantity and the minimum cost for Bell Computers to order, purchase, and hoid these integrated chips? Rich Blue Chip's Price Structure Quantity Purchased Price/Unit $350 $325 $300 1-99 units 100-199 units 200 or more units b) Bell Computers wishes to use a 10% holding cost rather than the fixed $35 holding cost in part a. What is the optimal order quan- tity, and what is the optimal cost?
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