Question: 2 . ( Inventory Management - Part 1 ) A manager just received a new price list from supplier. It will now cost (
Inventory Management Part A manager just received a new price list from supplier. It will now cost $ a box for order quantities of or more boxes, $ a box for to boxes, and $ for smaller quantities. Ordering cost is $ per order and carrying costs are $ per box a year. The firm uses boxes a year. The manager suggested a "round number" order size of boxes. The manager's rationale is that with a Ushaped cost curve that is flat at its minimum, the difference in total annual cost between and units would be small anyway. How would you reply to the manager's suggestion? What order size would you suggest?
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