5. Quantity Discount Model Suntech Manufacturing Company uses 5,300 scroll wheels for the mouse devices they produce per year. The price of the scroll wheels are given below. It costs approximately P475 to prepare an order and receive it, and carrying costs are 25 percent of purchase price per unit on an annual basis. Detemine the optimal order quantity and the total annual cost. Range Unit Price H 1 to 399 25 .25(25) = 6.25 400 to 699 23 .25(23) = 5.75 700 to 999 20 .25(20) = 5 1000 or more 17 .25(17) 4.25

5. Quantity Discount Model Suntech Manufacturing Company uses 5,300 scroll wheels for the mouse devices they produce per year. The price of the scroll wheels are given below. It costs approximately P475 to prepare an order and receive it, and carrying costs are 25 percent of purchase price per unit on an annual basis. Detemine the optimal order quantity and the total annual cost. Range Unit Price H 1 to 399 25 .25(25) = 6.25 400 to 699 23 .25(23) = 5.75 700 to 999 20 .25(20) = 5 1000 or more 17 .25(17) 4.25

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section10.4: Simulation With Built-in Excel Tools

Problem 14P

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