Drugs Online (DO) is an online retailer of prescription drugs and health supplements. Vitamins represent a...

 

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Drugs Online (DO) is an online retailer of prescription drugs and health supplements. Vitamins represent a significant percentage of its sales. Demand for vitamins is 5,000 bottles per month. DO incurs a fixed order placement, transportation, and receiving cost of $200 each time an order for vitamins is placed with the manufacturer. DO incurs a holding cost of 20 percent. The manufacturer uses the following all unit discount pricing schedule. Evaluate the number of bottles that the DO manager should order in each lot. Order Quantity 0-4,999 5,000-9,999 10,000 or more Unit Price $4.00 $3.5 $2.5 a. Find all potential order quantities. (3pt) b. Find the total cost of all potential order quantities. How much should customer order to minimize the total cost? (3pt) Drugs Online (DO) is an online retailer of prescription drugs and health supplements. Vitamins represent a significant percentage of its sales. Demand for vitamins is 5,000 bottles per month. DO incurs a fixed order placement, transportation, and receiving cost of $200 each time an order for vitamins is placed with the manufacturer. DO incurs a holding cost of 20 percent. The manufacturer uses the following all unit discount pricing schedule. Evaluate the number of bottles that the DO manager should order in each lot. Order Quantity 0-4,999 5,000-9,999 10,000 or more Unit Price $4.00 $3.5 $2.5 a. Find all potential order quantities. (3pt) b. Find the total cost of all potential order quantities. How much should customer order to minimize the total cost? (3pt)