The Bucks Grande exhibition baseball team plays 50 weekseach year and uses an average of 350 baseballs per week.The team orders baseballs from Coopers-Town, Inc., aball manufacturer noted for six-sigma-level consistency andhigh product quality. The cost to order baseballs is $100 perorder and the annual holding cost per ball is 38 percent of thepurchase price. Coopers-Town’s price structure is:Order Quantity Price per Unit1–999                    $7.501,000–4999           $7.255,000 or more       $6.50a. How many baseballs should the team buy per order?b. What is the total annual cost associated with the bestorder quantity?c. Coopers-Town, Inc., discovers that, owing to specialmanufacturing processes required for the Buck’s base-balls, it has underestimated the setup time required on acapacity-constrained piece of machinery. Coopers-Townadds another category to the price structure to provide anincentive for larger orders and thereby hopes to reducethe number of setups required. If the Bucks buy 15,000baseballs or more, the price will drop to $6.25 each.Should the Bucks revise their order quantity?

Practical Management Science
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Chapter2: Introduction To Spreadsheet Modeling
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The Bucks Grande exhibition baseball team plays 50 weeks
each year and uses an average of 350 baseballs per week.
The team orders baseballs from Coopers-Town, Inc., a
ball manufacturer noted for six-sigma-level consistency and
high product quality. The cost to order baseballs is $100 per
order and the annual holding cost per ball is 38 percent of the
purchase price. Coopers-Town’s price structure is:
Order Quantity Price per Unit
1–999                    $7.50
1,000–4999           $7.25
5,000 or more       $6.50
a. How many baseballs should the team buy per order?
b. What is the total annual cost associated with the best
order quantity?
c. Coopers-Town, Inc., discovers that, owing to special
manufacturing processes required for the Buck’s base-
balls, it has underestimated the setup time required on a
capacity-constrained piece of machinery. Coopers-Town
adds another category to the price structure to provide an
incentive for larger orders and thereby hopes to reduce
the number of setups required. If the Bucks buy 15,000
baseballs or more, the price will drop to $6.25 each.
Should the Bucks revise their order quantity?

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