Question: A company will begin stocking remote control devices. The expected monthly demand is 800 units. The controllers can be purchased from Supplier A with the
A company will begin stocking remote control devices. The expected monthly demand is 800 units. The controllers can be purchased from Supplier A with the following price schedule. Ordering cost is $40 and annual holding cost is 25 percent of unit price per unit.
A) What is the candidate order quantity at the unit price of $14.00?
B) What is the candidate order quantity at the unit price of $13.80?
C) What is the candidate order quantity at the unit price of $13.60?
D) What order quantity is optimal if the intent is to minimize total annual costs? Round intermediate calculations to the nearest whole numbers before computing the corresponding total annual costs.
E) What are the minimum total annual costs?
F) If the lead time is 2 months, at what point should the company reorder?
Please round all answers to the nearest whole number.
| Quantity | Unit Price |
| 1-199 | $14.00 |
| 200-499 | $13.80 |
| 500+ | $13.60 |
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