Question
Wal-Mart sells 10,000 cases of soda each year. The manager is trying to determine how many cases of soda should be ordered each time an
Wal-Mart sells 10,000 cases of soda each year. The manager is trying to determine how many cases of soda should be ordered each time an order is placed with the supplier. Ordering cost is $5 per order. The annual carrying cost per case is 20% of its purchase price. The soda supplier offers Walmart the schedule of quantity discounts shown in the table below.
No. of cases ordered | Purchase Price per case |
1 Q < 200 | $5.0 |
200 Q <400 | $4.5 |
Q 400 | $4.0 |
What is the optimal total annual inventory cost for this problem?
a. | None of the other options are correct | |
b. | 25,000
| |
c. | 35,300 | |
d. | 40,285 | |
e. | 30,285 |
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