Question
Annual demand for a special soldering material is 3000 lbs. The holding cost is 24% per year, based on the purchase price. Order cost is
Annual demand for a special soldering material is 3000 lbs. The holding cost is 24% per year, based on the purchase price. Order cost is $42 per order. The price schedule is as follows:
< 100 lbs. | $22 per pound |
100 lbs. to 1000 lbs. | $21 per pound |
More than 1000 lbs. | $20 per pound |
Determine how much should be bought at a time.
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
First we determine EOQ based on the highest price ie 22 EOQ 2CoDCh 2423000528 ...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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Get StartedRecommended Textbook for
Introduction To Materials Management
Authors: Arnold J. R. Tony, Gatewood Ann K., M. Clive Lloyd N. Chapman Stephen
8th edition
9386873249, 134156323, 978-9386873248
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