Question: The compressor unit of REL Refineries needs about on an average of 816 cases of SAE 30 weight oil every year. The ordering costs are
The compressor unit of REL Refineries needs about on an average of 816 cases of SAE 30 weight oil every year. The ordering costs are $12, carrying costs are $4 per case per year. The maintainance manager Mrs. Kiran Shah is looking at a new price schedule by the supplier Indane Oil that indicates orders less than 50 cases will cost $20 per case, 50 to 70 cases will cost $18 per case, 80 to 90 cases will cost $17 per case and larger orders will cost $16 per case. Determine the optimum order quantity and the total cost Mrs. Shah should Order.
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