The following quantity discount is offered to a company that purchases 120,000 units of the product annually.
Question:
Order Quantity Price per Unit
0–1999………………….. $50
2000–3999……………… $49
4000 or more…………… $46
Each time an order is placed, the company incurs a cost of $75. If the company’s carrying charge is 25% of the price of the item, what order quantity should it use to minimize its total inventory-related costs?
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Related Book For
Managing Supply Chain and Operations An Integrative Approach
ISBN: 978-0132832403
1st edition
Authors: Thomas Foster, Scott E. Sampson, Cynthia Wallin, Scott W Webb
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