  Miguel has a product with an annual holding cost percentage of 20%, an ordering cost of \$110 per order, and annual demand of 15,000 units. The following price schedule applies to the product from a supplier. What is the optimal order quantity? Show all work including a graph.Units              Price                      1-250             \$30.00                                    251-500         \$28.00501-750         \$26.00                                   ≥ 751              \$25.00

Question
1. Miguel has a product with an annual holding cost percentage of 20%, an ordering cost of \$110 per order, and annual demand of 15,000 units. The following price schedule applies to the product from a supplier. What is the optimal order quantity? Show all work including a graph.

Units              Price

1-250             \$30.00

251-500         \$28.00

501-750         \$26.00

≥ 751              \$25.00

Step 1

The following table shows that calculation of optimal order quantity and total cost:

Step 2

The following table shows the formula to determine the total cost and optimal order quantity:

Step 3

The following figure shows the graphical representation of quanti...

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