A small refrigeration shop stocks up on electric motors from a catalog supplier located in the...

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A small refrigeration shop stocks up on electric motors from a catalog supplier located in the Midwest. The price of the motors varies depending on the quantity purchased; the price breaks are shown in the table. The refrigeration shop knows it will need around 600 motors for the coming season and that it will cost them about $40 to place an order. Storage cost for the motors is $10 each. In previous years they have bought all 600 at once and they are considering doing this again. What order quantity would you advise and how much can they save using your recommendation instead of their one order per year strategy? Quantity 1-49 50-99 100-499 500 or more Number of Motors = Q*= TCQ= When considering the lowest cost options: TCQ= = Price/unit $35.00 $34.00 $33.00 $30.00 = 2DS H SD HQ + Q SD, HQ + + DP= + DP= A small refrigeration shop stocks up on electric motors from a catalog supplier located in the Midwest. The price of the motors varies depending on the quantity purchased; the price breaks are shown in the table. The refrigeration shop knows it will need around 600 motors for the coming season and that it will cost them about $40 to place an order. Storage cost for the motors is $10 each. In previous years they have bought all 600 at once and they are considering doing this again. What order quantity would you advise and how much can they save using your recommendation instead of their one order per year strategy? Quantity 1-49 50-99 100-499 500 or more Number of Motors = Q*= TCQ= When considering the lowest cost options: TCQ= = Price/unit $35.00 $34.00 $33.00 $30.00 = 2DS H SD HQ + Q SD, HQ + + DP= + DP=

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Economic order quantity Q can be calculated by using fo... View the full answer