VGHC operates its own laboratory on-site. The lab maintains an inventory of test kits for a...

 

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VGHC operates its own laboratory on-site. The lab maintains an inventory of test kits for a variety of procedures. VGHC uses 780 AIC kits each year. Ordering costs are $15 and holding costs are $3 per kit per year. The new price list indicates that orders of fewer than 73 kits will cost $60 per kit, 73 through 144 kits will cost $56 per kit, and orders of more than 144 kits will cost $53 per kit. Determine the optimal order quantity and the total cost. VGHC operates its own laboratory on-site. The lab maintains an inventory of test kits for a variety of procedures. VGHC uses 780 AIC kits each year. Ordering costs are $15 and holding costs are $3 per kit per year. The new price list indicates that orders of fewer than 73 kits will cost $60 per kit, 73 through 144 kits will cost $56 per kit, and orders of more than 144 kits will cost $53 per kit. Determine the optimal order quantity and the total cost.

Answer rating: 100% (QA)

To determine the optimal order quantity and the total cost we can use the Economic Order Quantity EO... View the full answer