The supplier of a product wants to discourage large quantity purchases. Suppose that all of the...

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The supplier of a product wants to discourage large quantity purchases. Suppose that all of the assumptions of the basic EOQ apply except that a reverse quantity discount is applicable; that is, the unit variable cost is equal to co for any Q such that 0 <Q< qı, and equals co(1 + d) for Q2 q1, with d> 0. a. Write an expression (or expressions) for the total relevant costs per year as a function of the order quantity Q. Introduce and define whatever symbols you feel are necessary. b. Using graphical sketches, indicate the possible position of the best order quantity (as is done in Figure 4-11 in your book for the regular discount case). c. What is the best order quantity for an item with the following characteristics: 1 = 50,000 units/year K= $10 c= $1/unit d = 0.005 i = 20% per year = 1500 units The supplier of a product wants to discourage large quantity purchases. Suppose that all of the assumptions of the basic EOQ apply except that a reverse quantity discount is applicable; that is, the unit variable cost is equal to co for any Q such that 0 <Q< qı, and equals co(1 + d) for Q2 q1, with d> 0. a. Write an expression (or expressions) for the total relevant costs per year as a function of the order quantity Q. Introduce and define whatever symbols you feel are necessary. b. Using graphical sketches, indicate the possible position of the best order quantity (as is done in Figure 4-11 in your book for the regular discount case). c. What is the best order quantity for an item with the following characteristics: 1 = 50,000 units/year K= $10 c= $1/unit d = 0.005 i = 20% per year = 1500 units

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