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Purchasing with Price Breaks. Universal Technologies, Inc. has identified two qualified vendors with the capability to supply certain of its electronic components. For the coming year, Universal has estimated its volume requirements for these components and has obtained price-break schedules from each vendor. (These are summarized as "all-units" price discounts in the table at the bottom of p. 333.) Universal's engineers have also estimated each vendor's maximum capacity for producing these components, on the basis of available information about equipment in use and labor policies in effect. Finally, because of its limited history with vendor A, Universal has adopted a policy that permits no more than 60 percent of its total unit purchases on these components to come from vendor A. a. What is the minimum total cost for Universal's purchases? b. In the optimal solution to part (a), which purchases are made at discounted prices?

Purchasing with Price Breaks. Universal Technologies, Inc. has identified two qualified vendors with the capability to supply certain of its electronic components. For the coming year, Universal has estimated its volume requirements for these components and has obtained price-break schedules from each vendor. (These are summarized as "all-units" price discounts in the table at the bottom of p. 333.) Universal's engineers have also estimated each vendor's maximum capacity for producing these components, on the basis of available information about equipment in use and labor policies in effect. Finally, because of its limited history with vendor A, Universal has adopted a policy that permits no more than 60 percent of its total unit purchases on these components to come from vendor A. a. What is the minimum total cost for Universal's purchases? b. In the optimal solution to part (a), which purchases are made at discounted prices?

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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7. Purchasing with Price Breaks. Universal Technologies, Inc. has identified two qualified vendors with the capability to supply certain of its electronic components. For the coming year, Universal has estimated its volume requirements for these components and has obtained price-break schedules from each vendor. (These are summarized as "all-units" price discounts in the table at the bottom of p. 333.) Universal's engineers have also estimated each vendor's maximum capacity for producing these components, on the basis of available information about equipment in use and labor policies in effect. Finally, because of its limited history with vendor A, Universal has adopted a policy that permits no more than 60 percent of its total unit purchases on these components to come from vendor A. a. What is the minimum total cost for Universal's purchases? b. In the optimal solution to part (a), which purchases are made at discounted prices?
Transcribed Image Text:7. Purchasing with Price Breaks. Universal Technologies, Inc. has identified two qualified vendors with the capability to supply certain of its electronic components. For the coming year, Universal has estimated its volume requirements for these components and has obtained price-break schedules from each vendor. (These are summarized as "all-units" price discounts in the table at the bottom of p. 333.) Universal's engineers have also estimated each vendor's maximum capacity for producing these components, on the basis of available information about equipment in use and labor policies in effect. Finally, because of its limited history with vendor A, Universal has adopted a policy that permits no more than 60 percent of its total unit purchases on these components to come from vendor A. a. What is the minimum total cost for Universal's purchases? b. In the optimal solution to part (a), which purchases are made at discounted prices?
1 2 3 500 1,000 2,500 A Vendor B Unit Price Volume Required Unit Price $225 0-250 $224 $220 250-500 $214 $124 0-600 $120 $115 (no discount) $60 $54 $56 $52 $51 BERASTE 600-1,000 0-1,000 1,000-2.000 2,000-2,500 Total Capacity (Units) 2,800 example, if 1,400 units are purchased from Vendor A, they cost $56 each for a total of $70.100 Volume Required 0-300 300-500 0-1,000 0-1,500 1,500-2,500 2.400 ant:
Transcribed Image Text:1 2 3 500 1,000 2,500 A Vendor B Unit Price Volume Required Unit Price $225 0-250 $224 $220 250-500 $214 $124 0-600 $120 $115 (no discount) $60 $54 $56 $52 $51 BERASTE 600-1,000 0-1,000 1,000-2.000 2,000-2,500 Total Capacity (Units) 2,800 example, if 1,400 units are purchased from Vendor A, they cost $56 each for a total of $70.100 Volume Required 0-300 300-500 0-1,000 0-1,500 1,500-2,500 2.400 ant:
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