Question
2 poin Sheetz' purchasing department is trying to establish an ordering policy for coffee that will minimize total costs. Forecasted demand for coffee for
2 poin Sheetz' purchasing department is trying to establish an ordering policy for coffee that will minimize total costs. Forecasted demand for coffee for the next year is 100,000 Ibs. The supplier offers the following quantity discount schedule. Order Quantity Price per pound 0-4,999 12.25 5,000-39,999 10.9 40,000+ 10.83 The purchasing department estimates the cost of placing an order at $119 and the inventory holding cost to be 7% of the unit cost. What is the optimai order size? Please round your answer to the nearest integer.
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Managerial Economics A Problem Solving Approach
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