Question
Hardy-brand is an auto parts supplier that sells batteries to car dealers and auto mechanics. Hardy-brand sells an average of 60 batteries per month to
Hardy-brand is an auto parts supplier that sells batteries to car dealers and auto mechanics. Hardy-brand sells an average of 60 batteries per month to car dealers and 40 per month to auto mechanics. Hardy-brand pays a wholesaler $30 for each battery, and estimates that the annual holding cost of a battery is 30 percent of the battery's cost. The wholesaler charges Hardy-brand $10 for each shipment of batteries (irrespective of the order size). Unloading the batteries and stocking them at the store is done by temporary laborers and costs Hardy-brand approximately $20 per shipment irrespective of the order size. Compute the optimal order size for Hardy-brand.
Step by Step Solution
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Step: 1
1 Determine Annual Demand Hardybrand sells 60 batteries per month to car dealers and 40 batt...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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