The 23,000-seat City Coliseum houses the local professional ice hockey, basketball, indoor soccer, and arena football teams, as well as various trade shows, wrestling and boxing matches, tractor pulls, and circuses. Coliseum vending annually sells large quantities of soft drinks and beer in plastic cups, with the name of the coliseum and the various team logos on them. The local container cup manufacturer that supplies the cups in boxes of 100 has offered coliseum management the following discount price schedule for cups: Order Quantity (boxes) Price per Box 2,000–6,999 $47 7,000–11,999 43 12,000–19,999 41 20,000+ 38 The annual demand for cups is 2.3 million, the annual carrying cost per box of cups is $1.90, and the ordering cost is $320. Determine the optimal order quantity and total annual inventory 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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The 23,000-seat City Coliseum houses the local professional ice hockey, basketball, indoor soccer,
and arena football teams, as well as various trade shows, wrestling and boxing matches,
tractor pulls, and circuses. Coliseum vending annually sells large quantities of soft drinks and
beer in plastic cups, with the name of the coliseum and the various team logos on them. The local
container cup manufacturer that supplies the cups in boxes of 100 has offered coliseum management
the following discount price schedule for cups:
Order Quantity (boxes) Price per Box
2,000–6,999 $47
7,000–11,999 43
12,000–19,999 41
20,000+ 38 The annual demand for cups is 2.3 million, the annual carrying cost per box of cups is $1.90,
and the ordering cost is $320. Determine the optimal order quantity and total annual inventory
cost.

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