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Drug Online (DO)is an online retailer of prescription drugs and health supplements. Vitamins represent a significant percentage of its sales. Demand for vitamins is 10,000
Drug Online (DO)is an online retailer of prescription drugs and health supplements. Vitamins represent a significant percentage of its sales. Demand for vitamins is 10,000 bottles per annum. .DO incurs a fixed ordering cost of $100 each time when an order is placed with manufacturer.DO incurs a holding cost of 20% of the unit price per annum. The manufacturer uses following all unit discount pricing schedule. How many numbers of bottles should DO manager order in each lot to minimize total annual cost.
Order Quantity | Unit Price |
0-4999 | $3.00 |
5000-9999 | $2.96 |
10 000 or more | $2.92 |
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