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Adap-Table has an annual demand of 5,600 adjustable height desks. Each desk costs $395. The holding cost is approximately 18% of the unit's cost, and
Adap-Table has an annual demand of 5,600 adjustable height desks. Each desk costs $395. The holding cost is approximately 18% of the unit's cost, and the ordering cost is $57 per order. 1. Determine the optimal order quantity that will minimize total cost. 2. What will the total annual costs of the adjustable height tables (include order (set-up) cost, holding cost, and purchase cost)? 3. In the course of a year, approximately how many orders are placed? EXTRA CREDIT (Up to +5 points): The manufacturer of the desk offered Adap-Table a 2% discount if they agree to order in lots of 200 . 4. Should Adap-Table take the quantity discount? If so, how much money would he be saving per year? If not, why not? (Show calculations to justify answer)
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