Question: A mail - order house uses 1 8 , 0 0 0 boxes a year. Carrying costs are 4 0 % of price per box

A mail-order house uses 18,000 boxes a year. Carrying costs are 40% of price per box a year, and ordering costs are $96. The mail-order house operates 300 days a year. The following price schedule applies.
Number of Boxes
Price per Box $1.25
1,000 to 1,999
2,000 to 4,999
$1.20
5,000 to 9,999
$1.15
10,000 or more
$1.10
Determine:
a) The optimal order quantity.
b) The number of orders per year.
c) The length of an order cycle.

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