Rand N Investment Corp. has an annual demand of 1,500, ordering costs of $15/order, and inventory...

  

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Rand N Investment Corp. has an annual demand of 1,500, ordering costs of $15/order, and inventory carrying costs of 25% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? When we use the quantity discount model, what are the two basics elements to take into consideration? Why? 1 to 499 $15.00 per unit $14.50 per unit $14.00 per unit $13.75 per unit Quantity Price 1,000 to 1,499 1,500 and up 500 to 999 Rand N Investment Corp. has an annual demand of 1,500, ordering costs of $15/order, and inventory carrying costs of 25% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? When we use the quantity discount model, what are the two basics elements to take into consideration? Why? 1 to 499 $15.00 per unit $14.50 per unit $14.00 per unit $13.75 per unit Quantity Price 1,000 to 1,499 1,500 and up 500 to 999

Answer rating: 100% (QA)

Answer I1 The price per unit against the applicable order size is as under Quantity Price per unit 1 to 499 1500 500 to 999 1450 1000 to 1499 1400 150... View the full answer