Question: Suppose M = 5 0 0 units, C = $ 1 0 per unit, and a full carload of 5 0 0 units costs $

Suppose M =500 units, C = $10 per unit, and a full carload of 500 units costs $3,000. a) Develop and interpret a graph of average cost per unit, C(Q)/Q, assuming the schedule. b) Suppose that the units are consumed at a rate of 800 per week, order setup cost is $2,500, and holding costs are based on an annual interest charge of 22%. Graph the function G(Q)=()=\lambda C(Q)/Q + k\lambda /Q + I(C(Q)/Q)Q/2 and find the optimal value of Q.(Assume that 1 year =50 weeks) c) Repeat part (b) for \lambda =1,000 per week and K = $1,500 and comment on the difference observed.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!