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Prentice Hall wants to reduce a large stock of Quantitative Analysis books from their warehouse. They have offered the JU Bookstore a quantity discount pricing schedule, as follows: QUANTITY 1- 99 100+ PRICE $150 $148 Assuming the annual demand rate is 400 books, the ordering cost is $20, and the annual holding cost is $3 per textbook, answer the following: 7a) What should your order size be if you want to minimize total cost? 7b) What is the minimum TOTAL ANNUAL COST?

Prentice Hall wants to reduce a large stock of Quantitative Analysis books from their warehouse. They have offered the JU Bookstore a quantity discount pricing schedule, as follows: QUANTITY 1- 99 100+ PRICE $150 $148 Assuming the annual demand rate is 400 books, the ordering cost is $20, and the annual holding cost is $3 per textbook, answer the following: 7a) What should your order size be if you want to minimize total cost? 7b) What is the minimum TOTAL ANNUAL COST?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7. Prentice Hall wants to reduce a large stock of Quantitative Analysis books from their warehouse. They have offered the JU Bookstore a quantity discount pricing schedule, as follows: QUANTITY 1 - 99 100+ PRICE $150 $148 Assuming the annual demand rate is 400 books, the ordering cost is $20, and the annual holding cost is $3 per textbook, answer the following: 7a) What should your order size be if you want to minimize total cost? 7b) What is the minimum TOTAL ANNUAL COST?
Transcribed Image Text:7. Prentice Hall wants to reduce a large stock of Quantitative Analysis books from their warehouse. They have offered the JU Bookstore a quantity discount pricing schedule, as follows: QUANTITY 1 - 99 100+ PRICE $150 $148 Assuming the annual demand rate is 400 books, the ordering cost is $20, and the annual holding cost is $3 per textbook, answer the following: 7a) What should your order size be if you want to minimize total cost? 7b) What is the minimum TOTAL ANNUAL COST?
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