A particular raw material is available to a company at three different prices, depending on size...

 

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A particular raw material is available to a company at three different prices, depending on size of the order: Order Quantity 144 Units Price $100 $90 $80 150 150-199 200-249 ≥250 $70 The cost to place an order is $40. Annual demand is 6500 units. Holding (or carrying) cost is 25 percent of the material price. (a) What quantity of this material should the company order to minimize total costs? (5%) (b) Follow by (a), what is the total cost? (5%) A particular raw material is available to a company at three different prices, depending on size of the order: Order Quantity 144 Units Price $100 $90 $80 150 150-199 200-249 ≥250 $70 The cost to place an order is $40. Annual demand is 6500 units. Holding (or carrying) cost is 25 percent of the material price. (a) What quantity of this material should the company order to minimize total costs? (5%) (b) Follow by (a), what is the total cost? (5%)

Answer rating: 100% (QA)

EOQ Sqrt 2 x A x O C Where A Annual demand 2600 units O Ordering cost 30 C Carrying or Holding cos... View the full answer