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Problem #3- Brass Department Store - Modified, from textbook page #202. The supplier for toy race cars has revised the quantity discount schedule and presented as follows: Discount Number Discount Cost ($) Discount Quantity O to 500 500 to 1,500 1,500 and over Discount (%) 6.00 5.70 10 5.40 Determine the which order quantity that minimize the total inventory cost.

Problem #3- Brass Department Store - Modified, from textbook page #202. The supplier for toy race cars has revised the quantity discount schedule and presented as follows: Discount Number Discount Cost ($) Discount Quantity O to 500 500 to 1,500 1,500 and over Discount (%) 6.00 5.70 10 5.40 Determine the which order quantity that minimize the total inventory cost.

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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Problem #3 - Brass Department Store-Modified, from textbook page #202. The supplier for toy race cars has revised the quantity discount schedule and presented as follows: Discount (%) Discount Cost ($) Discount Quantity O to 500 500 to 1,500 1,500 and over Discount Number 1 6.00 2 5 5.70 3 10 5.40 Determine the which order quantity that minimize the total inventory cost. Page 3 of 4 CS Scanned with CamScanner
Transcribed Image Text:Problem #3 - Brass Department Store-Modified, from textbook page #202. The supplier for toy race cars has revised the quantity discount schedule and presented as follows: Discount (%) Discount Cost ($) Discount Quantity O to 500 500 to 1,500 1,500 and over Discount Number 1 6.00 2 5 5.70 3 10 5.40 Determine the which order quantity that minimize the total inventory cost. Page 3 of 4 CS Scanned with CamScanner
Let's see how this procedure can be appled by showing an example. Brass Department Store stocks toy race cars. Recently, the store was given a quantity discount schedule for the cars; this quantity discount schedule is shown in Table 630. Thus, the normal cost for the toy race cars is $5. For orders between 1,000 and 1,999 units, the unit cost is $4.80, and for orders of 2,000 or more units, the unit cost is $4.75. Furthermore, the ordering costs $49 per order, the arnual demand is 5,000 race cars, and the inventory carrying charge as a percentage of cost, I, is 20% or 0.2. What order quartity will minimize the total inventory cost? The first step is to compute E00 for every discount in Table 630 This is done as follows: EOQ - 700 cars per order EOQ, - 714 cars per order EOQ, - - 718 cars per oeder 202
Transcribed Image Text:Let's see how this procedure can be appled by showing an example. Brass Department Store stocks toy race cars. Recently, the store was given a quantity discount schedule for the cars; this quantity discount schedule is shown in Table 630. Thus, the normal cost for the toy race cars is $5. For orders between 1,000 and 1,999 units, the unit cost is $4.80, and for orders of 2,000 or more units, the unit cost is $4.75. Furthermore, the ordering costs $49 per order, the arnual demand is 5,000 race cars, and the inventory carrying charge as a percentage of cost, I, is 20% or 0.2. What order quartity will minimize the total inventory cost? The first step is to compute E00 for every discount in Table 630 This is done as follows: EOQ - 700 cars per order EOQ, - 714 cars per order EOQ, - - 718 cars per oeder 202
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