Let's consider the inventory problem with quantity discounts. The parameters are as follows: Annual demand lambda =
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Question:
Let's consider the inventory problem with quantity discounts. The parameters are as follows:
Annual demand lambda = 25000,
Order cost K = 100,
I = 0.3.
For order quantities between 0 and 499, you pay c(Q) = 21.60 per unit
For order quantities between 500 and 999, you pay c(Q) = 20.95 per unit
For order quantities >= 1000, you pay c(Q) = 20.90 per unit.
What is your total cost per year if your order quantity is 380 per order?
My answer = 547810.15
The correct answer = (531524)
Related Book For
Essentials of Business Analytics
ISBN: 978-1285187273
1st edition
Authors: Jeffrey Camm, James Cochran, Michael Fry, Jeffrey Ohlmann, David Anderson, Dennis Sweeney, Thomas Williams
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