A manufacturer of exercise equipment purchases pulleys from a supplier who lists these prices: less than 1,000, $5 each; 1,000 to 3,999, $4.95 each; 4,000 to 5,999, $4.90 each; and 6,000 or more, $4.85 each. Ordering cost is $50 per order, annual holding cost is 20 percent of purchase cost, and annual usage is 4,900 pulleys. Determine the order quantity that will minimize total cost

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...
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A manufacturer of exercise equipment purchases pulleys from a supplier who lists these prices: less than 1,000, $5 each; 1,000 to 3,999, $4.95 each; 4,000 to 5,999, $4.90 each; and 6,000 or more, $4.85 each. Ordering cost is $50 per order, annual holding cost is 20 percent of purchase cost, and annual usage is 4,900 pulleys. Determine the order quantity that will minimize total cost.

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ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,