Question

Community Hospital orders latex sanitary gloves from a hospital supply firm. The hospital expects to use 40,000 pairs of gloves per year. The cost to order and to have the gloves delivered is $180. The annual carrying cost is $0.18 per pair of gloves. The hospital supply firm offers the following quantity discount pricing schedule:
Quantity ....... Price
0–9,999 ....... $0.34
10,000–19,999 ...... 0.32
20,000–29,999 ...... 0.30
30,000–39,999 ...... 0.28
40,000–49,999 ..... 0.26
50,000+ ....... 0.24

Determine the optimal order size for the hospital.



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  • CreatedJuly 17, 2014
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