4. A mail-order house uses 18,000 boxes a year. Carrying costs are $.60 per box per yearand ordering costs are $96. The following price schedule is offered. Determine the EOQand the # of orders per year.# BoxesUnit Price1000-1999$1.252000-4999$1.205000-9999$1.1510000+$1.10a. What is the order quantity following the EOQ model?b. Considering the quantity discount, would the economic order quantity be changed?c. Supposed that the holding cost is 48% of the price, what is the optimal order quantity?

An economic order quantity is a type of production planning used to minimize the total cost of…

Answered: a. What is the order quantity following…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter3: Introduction To Optimization Modeling

Section3.8: A Multiperiod Production Model

Problem 22P

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a. What is the order quantity following the EOQ model? b. Considering the quantity discount, would the economic order quantity be changed? c. Supposed that the holding cost is 48% of the price, what is the optimal order quantity?