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Problem 20-39 (Algo) CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to
Problem 20-39 (Algo) CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem: Price of copper 0.80 per pound up to 2,999 pounds 0.79 per pound for orders between 3,000 and 5,999 pounds 7 per pound for orders 6,000 pounds or greater Annual demand 19,000 pounds per year Holding cost 30 percent per unit per year of the price of the copper Ordering cost 30 Which quantity should be ordered? Quantity pounds
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