Example 1. Surge Electric uses 4000 toggle switches a year. Switches are priced as follows. 1 to 499, $O.90 each. 500 to 999, $0.85 each. and 1000 or more, $0.80 each. It costs approximately $30 to prepare an order and receive it, and the carrying costs are 40% of the purchase price per unit on an annual basis. Determine the optimal order quantity and the total annual cost. Solution antity Prige ner umit
Example 1. Surge Electric uses 4000 toggle switches a year. Switches are priced as follows. 1 to 499, $O.90 each. 500 to 999, $0.85 each. and 1000 or more, $0.80 each. It costs approximately $30 to prepare an order and receive it, and the carrying costs are 40% of the purchase price per unit on an annual basis. Determine the optimal order quantity and the total annual cost. Solution antity Prige ner umit
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 17P
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