Question: pls solve problem,write solutions in Excel. worksheet. Question: A company uses 2,000 units of a product each year (constant usage). The product is purchased from
pls solve problem,write solutions in Excel. worksheet.
Question:
A company uses 2,000 units of a product each year (constant usage). The product is purchased from a supplier at a unit cost of $4; however, the company must pay the freight from the supplier's plant. Each unit weighs 5 pounds; the shipping cost is 20 cents per pound. The company estimates the order-processing cost is $25 per order; inventory holding costs are 20 percent per dollar per year.
1. Find the optimal order quantity.
2. Suppose that for shipments above 300 pounds but less than 10,000 pounds, a flat charge of $50 per shipment (not per pound) is charged, while for shipments below 300 pounds that rate remains at 20 cents per pound. Now, what order quantity should be used to minimize the sum of all relevant variable costs?
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