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. Note: Please include all required calculations in your report clearly.
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. Note: Please include all required calculations in your report clearly.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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
Transcribed Image Text:Question 4
The City Theater Center holds various shows, concerts and circuses. CTC vending annually sells
large quantities of soft drinks and beer in plastic cups, with the name of the city on them. The
local container cup manufacturer that supplies the cups in boxes of 100 has offered CTC
management the following discount price schedule for cups:
Order Quantity (in boxes)
Price per Box $
2000-6999
47
7000-11999
43
12000-19999
41
20000+
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.
Note: Please include all required calculations in your report clearly.
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