II. A firm's requirement of materials is 3000 units (Price Rs 20 per unit) for 6 days. The ordering cost per order is Rs 30 and the carrying cost is Rs.50. If the schedule of discount given below is applicable to the firm, determine the most economical order quantity.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter18: The Management Of Accounts Receivable And Inventories
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III. A firm's requirement of materials is 3000 units (Price Rs 20 per unit) for 6 days. The ordering
cost per order is Rs 30 and the carrying cost is Rs.50. If the schedule of discount given below
is applicable to the firm, determine the most economical order quantity.
Lot size
Discount Rate
1-499
None
500-699
1%
700-999
2%
1000-2499
4%
2500 and above
7%
Transcribed Image Text:III. A firm's requirement of materials is 3000 units (Price Rs 20 per unit) for 6 days. The ordering cost per order is Rs 30 and the carrying cost is Rs.50. If the schedule of discount given below is applicable to the firm, determine the most economical order quantity. Lot size Discount Rate 1-499 None 500-699 1% 700-999 2% 1000-2499 4% 2500 and above 7%
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