Question: using EOQ and quantity discount model An ice cream industry gets sugar from an outside supplier and the rate of sugar consumption is constant. The
using EOQ and quantity discount model
An ice cream industry gets sugar from an outside supplier and the rate of sugar consumption is constant. The industry has decided to replenish the stock by ordering a fixed quantity at regular intervals. The demand for sugar is 10 tons per year. The cost of the order is 50 Euros per order. The cost of maintaining sugar is 40 Euros per ton and year. In case the price of sugar is stable and equal to 1000 Euros per ton: 1. Find the order quantity that has the minimum cost as well as the number of orders per year for the above quantity. Assume that the sugar supplier changes its pricing policy as follows: For a quantity less than 8 tons it sells for 1000 Euros per ton while for a quantity greater than or equal to 8 tons it sells for 990 Euros per ton. In this case find again: 2. The order quantity that has the minimum cost
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