An electronic manufacturer has qualified a supplier for buying the remote control component.

The cost to place an order is $$40.$ Annual demand is $3,000$ units. The holding cost is $25\%$ of the component price.

Unit price depends on the size of the order as shown berow:

Order Ouantity

Less than $100$ units

$100$ units to $1,000$ units More than $1,000$ units

Unit price

$$20$ each

$$19$ each

$lg each

$($a$)$ In each quantity discount, what is the economic order quantity $($Eoe$)$ based $(6$ marks$)$ on each unit price?

Ref: EOq: EDS t$\_$

lic

$($b$)$ Based on the results in $($a$),$ comment on the feasibility of each calculated $(9$ marks$)$ EOQ at each quantity discount. Determine the best order size based on the

total cost.

Ref.: TC : DC $+\{$s $*9$rC g$3$

$,$

$($c$)$ List TWo assumptions of EoQ model, and discuss with example$($s$)$ about $(10$ marks$)$

applicability of Eoe model in the production plan and control environment.