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Best Buy sells three models of computers, the Litepro, the Medpro, and the Heavypro. Annual demands for the three products are DL = 12,000
Best Buy sells three models of computers, the Litepro, the Medpro, and the Heavypro. Annual demands for the three products are DL = 12,000 for the Litepro, DM = 1,200 units for the Medpro, and DH = 120 units for the Heavypro. Each model costs Best Buy $500. A fixed transportation cost of $4,000 is incurred each time an order is delivered. For each model ordered and delivered on the same truck, an additional fixed cost of $1,000 per model is incurred for receiving and storage. Best Buy incurs an annual unit holding cost of 20 percent.. Each product is ordered and delivered independently.. 3. (Continued from question 1) Suppose Best Buy's Litepro supplier now offers quantity discount. If Best Buys orders more than 2000 (including 2000) computers in a single order, it will be charged. a discounted price for all units ordered. a. If the discount rate is 1%, find the optimal order quantity and total annual cost including fixed ordering cost, variable ordering cost, and inventory holding cost. (3pt)|| b. If the discount rate is 0.1%, find the optimal order quantity and total annual cost including fixed ordering cost, variable ordering cost, and inventory holding cost. (3pt)| 1
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