Bell Computers purchases integrated chips at $350.00 per chip. The holding cost is $35.00 per unit per year, the ordering cost is $120.00 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below. Rich Blue Chip's Price Structure Price/Unit $350 $325 $300 Quantity Purchased 1-99 units 100-199 units 200 or more units a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips? The optimal order quantity after the change in pricing structure is units (enter your response as a whole number). The total annual cost for Bell computers to order, purchase, and hold the integrated chips is $O (round your response to the nearest whole number).

Bell Computers purchases integrated chips at $350.00 per chip. The holding cost is $35.00 per unit per year, the ordering cost is $120.00 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below. Rich Blue Chip's Price Structure Price/Unit $350 $325 $300 Quantity Purchased 1-99 units 100-199 units 200 or more units a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips? The optimal order quantity after the change in pricing structure is units (enter your response as a whole number). The total annual cost for Bell computers to order, purchase, and hold the integrated chips is $O (round your response to the nearest whole number).

Name: Bell Computers purchases integrated chips at $350.00 per chip. The ho
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Description: Bell Computers purchases integrated chips at $350.00 per chip. The holding cost is $35.00 per unit per year, the ordering costis $120.00 per order, and sales are steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc.,dec

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter2: The Purchasing Process

Section: Chapter Questions

Problem 1GPE

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Bell Computers purchases integrated chips at $350per chip. The holding cost is $35 per unit per year, the orderingcost is $120 per order, and sales are steady, at 400 per month. Thecompany's supplier, Rich Blue Chip Manufacturing, Inc., decidesto offer price concessions in order to attract larger orders. Theprice structure is shown in the table. a) What is the optimal order quantity and the minimum annualcost for Bell Computers to order, purchase, and hold theseintegrated chips?b) Bell Computers wishes to use a 10% holding cost rather thanthe fixed $35 holding cost in (a). What is the optimal orderquantity, and what is the optimal annual cost?
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