Question: An electronic store sells 1100 model X computers annually. Annual carrying cost is 12% of the unit cost. Order cost is $80. The lead time

An electronic store sells 1100 model X computers annually. Annual carrying cost is 12% of the unit cost. Order cost is $80. The lead time for receiving computers is 5 days. The supplier offers discounted prices for the store based on order quantity as given below:

Order quantity (Q) Unit Price ($)
Q < 50 440
50 <=Q <75 420
75 <= Q < 99 400
Q >= 100

390

Give your answers to two decimal places.

  1. Find the minimum cost order quantity at price level $400

  2. Find the optimal order quantity

  3. Find the annual ordering cost for optimal order quantity

  4. Find the annual holding cost for optimal order quantity

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