Question: A vendor is offering discount pricing. based on order quantity for a product with a need for 1800 annually. Quantity 1 - 299 300-699 700-1599

A vendor is offering discount pricing. based on order quantity for a product with a need for 1800 annually.

Quantity

1 - 299

300-699

700-1599

1600 and up

Price per Item

65.80

63.40

60.90

59.50

The purchaser requires 1800 annually and has ordering cost of 210 holding cost of 20.0%.

a. What is the best economic purchase quantity for lowest total cost? The amount ordered must be stated for credit.

b. What is the total annual cost for this best purchase amount? Include stocking and purchase cost in total.

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