Question
Sunbright Citrus Products produces orange juice, grapefruit juice, and other citrus-related items. Sunbright obtains fruit concentrate from a cooperative in Orlando consisting of approximately 50
Sunbright Citrus Products produces orange juice, grapefruit juice, and other citrus-related items. Sunbright obtains fruit concentrate from a cooperative in Orlando consisting of approximately 50 citrus growers. The cooperative will sell a minimum of 100 cans of fruit concentrate to citrus processors such as Sunbright. The cost per can is $9.90.
Last year, the cooperative developed the Incentive Bonus Program to give an incentive to their large customers to buy in quantity. It works like this: if 200 cans of concentrate are purchased, 10 cans of free concentrate are included in the deal. At 300 cans of concentrate, the cooperative will give away 30 free cans. When the quantity goes up to 400 cans of concentrate, 40 cans of concentrate will be given away free with the order.
Sunbright estimates that its annual demand for fruit concentrate is 1,000 cans. In addition, the ordering cost is estimated to be $10, while the carrying cost is estimated to be 10%, or about $1 per unit. The firm is intrigued with the Incentive Bonus Program.
My professor listed the answer as 300 units. If someone could figure out how to get what he's looking for that'd be great.
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