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A firm uses 7500 units per year of a particular item. Holding costs are 15% per year and the fixed costs of ordering are 15$
A firm uses 7500 units per year of a particular item. Holding costs are 15% per year and the fixed costs of ordering are 15$ per order. The replenishment rate is infinite. If the firm orders in quantities of 1000 units or less, the item costs 6$ per unit. If the firm orders in quantities of greater than 1000 units, the item costs 5.95$ per unit. a. Find the optimum ordering strategy by evaluating the total costs (including material costs) of ordering strategies between 250 and 1200 units per order.
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