Prentice Hall wants to reduce a large stock of Quantitative Analysis books from their warehouse. They have offered the JU Bookstore a quantity discount pricing schedule, as follows: QUANTITY 1- 99 100+ PRICE $150 $148 Assuming the annual demand rate is 400 books, the ordering cost is $20, and the annual holding cost is $3 per textbook, answer the following: 7a) What should your order size be if you want to minimize total cost? 7b) What is the minimum TOTAL ANNUAL COST?

Prentice Hall wants to reduce a large stock of Quantitative Analysis books from their warehouse. They have offered the JU Bookstore a quantity discount pricing schedule, as follows: QUANTITY 1- 99 100+ PRICE $150 $148 Assuming the annual demand rate is 400 books, the ordering cost is $20, and the annual holding cost is $3 per textbook, answer the following: 7a) What should your order size be if you want to minimize total cost? 7b) What is the minimum TOTAL ANNUAL COST?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 21P

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