Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show formulas and setup, Thanks An electronics retailer has decided to offer a new rechargeable battery pack to its customers. Based on market analyses,

Please show formulas and setup, Thanks
image text in transcribed
An electronics retailer has decided to offer a new rechargeable battery pack to its customers. Based on market analyses, they expect the demand to be about 650 battery packs each month. The retailer can purchase the battery packs from one of two suppliers: ChargeMe or PowerUp. Based upon the number of battery packs the retailer purchases, quantity discounts may apply. Table 3 below lists the prices associated with each of the two suppliers. Table 3: Supplier quantity and price combinations Charge Me PowerUp Quantity Price per Pack Quantity Price per Pack 1-149 $15.00 1-199 $15.20 150-349 $14.50 200-499 $14.80 350+ $14.00 500+ $14.30 The ordering cost per pack is $25 and the annual holding cost is 20% of the price per pack. Fill in Table 4 below with the following information, A. What is the economic order quantity (Q*) for each price point? (6) B. For each price point, indicate whether the economic order quantity is feasible. (3) C. What is the lowest annual cost for each price point? (3) Note: Show your actual calculations on a separate sheet. Excel screenshots will not be accepted as work. Use the most appropriate rounding rule for each calculation. Table 4: Answer table ChargeMe Quantity Price per Pack Q* Feasible? (Y/N) Lowest Annual Cost 1-149 $15.00 150-349 $14.50 $14,00 PowerUp Quantity Price per Pack Q Feasible? (Y/N) Lowest Annual Cost 1-199 $15.20 200-499 $14.80 500+ $14.30 350+ Based on the calculations answer the following questions, D. Which supplier should be used if the goal is to minimize the annual cost? (3) E. What order quantity for the supplier identified in (D) will result in the lowest annual cost? (3) E. What is the lowest annual cost? (2)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Financial Accounting Acc 201 College Of Southern Nevada

Authors: Weygandt. Kimmel. Kieso

13th Edition

1118742966, 978-1118742969

More Books

Students also viewed these Accounting questions