Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A manufacturer of exercise equipment purchases the pulley section of the equipment from a supplier who lists these prices: less than 1000, $5.8 each; 1,000

A manufacturer of exercise equipment purchases the pulley section of the equipment from a supplier who lists these prices: less than 1000, $5.8 each; 1,000 to 3,999, $5.4 each; 4,000 to 5,999, $5.0 each; and 6,000 or more, $4.6 each. Ordering costs are $70 per order, annual carrying costs are 30 percent of the purchase cost, and annual usage is 5,000 pulleys. Determine an order quantity that will minimize the total cost (Ordering + Holding + Purchase).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Management Science

Authors: Bernard W. Taylor

11th Edition

132751917, 978-0132751919

More Books

Students also viewed these General Management questions

Question

Describe the primary differences between goods and service firms.

Answered: 1 week ago