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The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 960 units, S = $5/order, and
The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 960 units, S = $5/order, and I = 20% of item price. The current price is $19.2 per unit (without any discount). Price is determined by the following quantity discount schedule. Order Quantity 1 to 50 Price 51 to 100 101 and up No discount 20% discount 40% discount Should the company take advantage of the quantity discount? What should the order quantity be in order to minimize the total annual cost? Show your work. la 085
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