Sam's Bookstore, with many locations across the US, places orders for all of the latest books and
Question:
Sam's Bookstore, with many locations across the US, places orders for all of the latest books and then distributes them to its individual bookstores. Sam's needs a model to help it order the appropriate number of any title. For example, Sam's plans to order a popular new hardback novel, which it will sell for $30. It can purchase any number of this book from the publisher, but due to quantity discounts, the unit cost for all books it orders depends on the number ordered. See the Table 1 for the quantity discount structure. Sam's is very uncertain about the demand - it estimates that the demand could be anywhere from 500 to 4500. Also, as with most hardback novels, this one will eventually come out in paperback. Therefore, if Sam's has any hardbacks left when the paperback comes out, it will put them on sale for $10, at which price, it believes all leftovers will be sold.
| Table 1 Quantity discount structure | |||
| At least | Unit cost | ||
| 1 | $24.00 | ||
| 1000 | $23.00 | ||
| 2000 | $22.25 | ||
| 3000 | $21.75 | ||
| 4000 | $21.30 | ||
Create a spreadsheet that will calculate the profit for any demand and quantity combination. Be sure to use V Lookup
