A book publisher wants to know how many timesa year a print run should be scheduled. Suppose itcosts ?$1300 to set up the printing? process, andthe subsequent cost per book is so low it can beignored. Suppose further that the annualwarehouse cost is ?$7 times the maximum numberof books stored. Assuming 4900 copies of thebook are needed per? year, how many booksshould be printed in each print? run? Note thatsince the warehouse cost is based on themaximum number of books held and not the?fMkk should be usedaverage, the equationto determine the order quantity.The publisher should printbooks in eachprint run.

Here, we calculate the order quantity of book in each print run by the following method given below…

rehouse cost is ?$7 times the maximum nun pooks stored. Assuming 4900 copies of the ok are needed per? year, how many books uld be printed in each print? run? Note that ce the warehouse cost is based on the ximum number of books held and not the?

rehouse cost is ?$7 times the maximum nun pooks stored. Assuming 4900 copies of the ok are needed per? year, how many books uld be printed in each print? run? Note that ce the warehouse cost is based on the ximum number of books held and not the?

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

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 9E

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Question

A book publisher wants to know how many times
a year a print run should be scheduled. Suppose it
costs ?$1300 to set up the printing? process, and
the subsequent cost per book is so low it can be
ignored. Suppose further that the annual
warehouse cost is ?$7 times the maximum number
of books stored. Assuming 4900 copies of the
book are needed per? year, how many books
should be printed in each print? run? Note that
since the warehouse cost is based on the
maximum number of books held and not the?
fM
k
k should be used
average, the equation
to determine the order quantity.
The publisher should print
books in each
print run.

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