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John Lindsay sells CDs that contain 25 software packages that perform a variety of financial functions including net present value, internal rate of return, and
John Lindsay sells CDs that contain 25 software packages that perform a variety of financial functions including net present value, internal rate of return, and other financial programs typically used by business students majoring in finance. Depending on the quantity ordered, its supplier offers the following price discounts. The annual demand is 2,000 units. John's ordering cost is $250 per order and the holding cost is $1 per unit per year. Quantity ordered To (units 599 1199 1,799 Price $10.00 $9.95 $9.90 $9.85 Price ranges From (units 2 3 4 600 1,200 1,800 and u a) Determine the order quantity that will minimize total cost. b) If the supplier's lead time is 10 days, what is the optimal purchasing policy of the manufacturer (assuming a year has 250 working days)
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