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A manufacturer of plastic bottles needs 29 kg of raw material each week and sources it from its supplier. Every time the manufacturer places an order, it incurs a cost of $20. The carrying cost rate is 25% per year. The purchasing price of raw material is based on the size of the order as shown below: Cost per kg : $1.00 for order size between 0 and 499 kg. : $0.99 for order size between 500 and 999 kg. : $0.98 for order size above 1000 kg. Assuming allunits discount, determine the feasible and optimal order quantity. Plot the total inventory cost - volume diagramStep by Step Solution
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