Question
Forecasts show that 10,000 units need to be purchased on an annual basis. The producer offers a sliding price scale based on the quantity
Forecasts show that 10,000 units need to be purchased on an annual basis. The producer offers a sliding price scale based on the quantity in each order, as follows. Ordering Cost per year for orders up to 300 units is $1000 (Note: ordering costs per year for other order sizes are not needed). Holding cost is 20% of unit price. Order Quantity Unit Price 1-300 $40 301-1000 $35 1000+ $32 Determine the optimal order quantity.
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Cost Accounting
Authors: William K. Carter
14th edition
759338094, 978-0759338098
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