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The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are D = 800 units, S = $25/order and I = 30% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Quantity Price Q2 1 to 49 $5.00 per unit 50 to 249 $4.50 per unit 250 and up $4.10 per unit An electric toy car manufacturer Baranka makes its own wind-up motors, which are then put into its cars. While the toy manufacturing process is continuous, the motors are intermittent flow. Baranka has an annual demand of 50,000 cars. It costs $90 to set up production process and 20 cents to hold one unit per year. Baranka's daily manufacturing capability is 1,000 units, and ships 200 units to the customers daily.

The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are D = 800 units, S = $25/order and I = 30% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Quantity Price Q2 1 to 49 $5.00 per unit 50 to 249 $4.50 per unit 250 and up $4.10 per unit An electric toy car manufacturer Baranka makes its own wind-up motors, which are then put into its cars. While the toy manufacturing process is continuous, the motors are intermittent flow. Baranka has an annual demand of 50,000 cars. It costs $90 to set up production process and 20 cents to hold one unit per year. Baranka's daily manufacturing capability is 1,000 units, and ships 200 units to the customers daily.

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 1PA: When prices are rising (inflation), which costing method would produce the highest value for gross...
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The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are D = 800 units, S = $25/order and I = 30% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Quantity Price Q2 1 to 49 $5.00 per unit 50 to 249 $4.50 per unit 250 and up $4.10 per unit An electric toy car manufacturer Baranka makes its own wind-up motors, which are then put into its cars. While the toy manufacturing process is continuous, the motors are intermittent flow. Baranka has an annual demand of 50,000 cars. It costs $90 to set up production process and 20 cents to hold one unit per year. Baranka's daily manufacturing capability is 1,000 units, and ships 200 units to the customers daily.
Transcribed Image Text:The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are D = 800 units, S = $25/order and I = 30% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Quantity Price Q2 1 to 49 $5.00 per unit 50 to 249 $4.50 per unit 250 and up $4.10 per unit An electric toy car manufacturer Baranka makes its own wind-up motors, which are then put into its cars. While the toy manufacturing process is continuous, the motors are intermittent flow. Baranka has an annual demand of 50,000 cars. It costs $90 to set up production process and 20 cents to hold one unit per year. Baranka's daily manufacturing capability is 1,000 units, and ships 200 units to the customers daily.
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