HyVee stocks toy race cars in some of its stores. HyVee's vendor offers a quantity discount schedule
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Question:
HyVee stocks toy race cars in some of its stores. HyVee's vendor offers a quantity discount schedule for the toy cars. The normal cost for the toy race car is $5.00. For orders between 1000 and 1999 cars, the unit cost drops to $4.80; for orders of 2000 or more units, the unit cost is $4.75. The cost to place an order is $49, annual demand is 5000 toy cars, and the inventory holding charge is 40%.
A) What order quantity will minimize the annual total cost? Round your answer to the nearest whole number of toy cars.
B) What is the annual total cost? Round your answer to the nearest cent.
Related Book For
Operations Management Managing Global Supply Chains
ISBN: 978-1506302935
1st edition
Authors: Ray R. Venkataraman, Jeffrey K. Pinto
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