The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 600 units, S= $20/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?
The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 600 units, S= $20/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?
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...
Related questions
Question
The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 600 units, S= $20/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?
![The annual demand, ordering cost, and the inventory carrying cost rate for a certain item
are D = 600 units, S= $20/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
1 to 49
50 to 249
250 and up
Price
$5.00/unit
$4.50/unit
$4.10/unit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4d6ce828-7421-4579-a347-7b809a44673d%2F8e01250a-6c9f-497e-a884-99d3bab35573%2F71hgkgm_processed.png&w=3840&q=75)
Transcribed Image Text:The annual demand, ordering cost, and the inventory carrying cost rate for a certain item
are D = 600 units, S= $20/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
1 to 49
50 to 249
250 and up
Price
$5.00/unit
$4.50/unit
$4.10/unit
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
![Operations Management](https://www.bartleby.com/isbn_cover_images/9781259667473/9781259667473_smallCoverImage.gif)
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
![Operations and Supply Chain Management (Mcgraw-hi…](https://www.bartleby.com/isbn_cover_images/9781259666100/9781259666100_smallCoverImage.gif)
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
![Operations Management](https://www.bartleby.com/isbn_cover_images/9781259667473/9781259667473_smallCoverImage.gif)
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
![Operations and Supply Chain Management (Mcgraw-hi…](https://www.bartleby.com/isbn_cover_images/9781259666100/9781259666100_smallCoverImage.gif)
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
![Business in Action](https://www.bartleby.com/isbn_cover_images/9780135198100/9780135198100_smallCoverImage.gif)
![Purchasing and Supply Chain Management](https://www.bartleby.com/isbn_cover_images/9781285869681/9781285869681_smallCoverImage.gif)
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
![Production and Operations Analysis, Seventh Editi…](https://www.bartleby.com/isbn_cover_images/9781478623069/9781478623069_smallCoverImage.gif)
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.