Question 4 Doris is an entrepreneur who purchases from wholesale suppliers and resells these items to her customers. She wishes to purchase cupcake boxes directly from a new supplier. She wants to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price for the boxes depends on the quantity ordered as shown below. Price of cupcake boxes $0.82 per box up to 2,499 boxes: $0.81 per box between 2,500 and 5,000 boxes $0.80 per box for more than 5,000 boxes. The annual demand is estimated to be 50,000 boxes per year with holding cost of 20% of the price of the box. Ordering cost is fixed at $30.00. Calculate a. Determine which range is feasible. b. By calculating the total cost state, the number of boxes Doris should order.
Question 4 Doris is an entrepreneur who purchases from wholesale suppliers and resells these items to her customers. She wishes to purchase cupcake boxes directly from a new supplier. She wants to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price for the boxes depends on the quantity ordered as shown below. Price of cupcake boxes $0.82 per box up to 2,499 boxes: $0.81 per box between 2,500 and 5,000 boxes $0.80 per box for more than 5,000 boxes. The annual demand is estimated to be 50,000 boxes per year with holding cost of 20% of the price of the box. Ordering cost is fixed at $30.00. Calculate a. Determine which range is feasible. b. By calculating the total cost state, the number of boxes Doris should order.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
Related questions
Question
Question 4. Please help with a & b. Thank you
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning