The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 960 units, S = $5/order, and I= 20% of item price. Current price is $19.2 per unit (without any discount). Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Show your work. Order Quantity to 50 Price 101 and up 51 to 100 INo discount 20% discount 40% discount What should the order quantity be in order to minimize the total annual cost? Show your work. D-960 S-55 1-20% CURRENT PRICE-19.20

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter10: Introduction To Simulation Modeling
Section10.4: Simulation With Built-in Excel Tools
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The annual demand, ordering cost, and the inventory carrying cost rate for a certain item
are D = 960 units, S= $5/order, and I= 20% of item price. Current price is $19.2 per unit
(without any discount). Price is established by the following quantity discount schedule.
What should the order quantity be in order to minimize the total annual cost? Show your
work
Order Quantity 1 to 50 51 to 100
Price
No discount 20% discount 40% discount
o,
101 and up
What should the order quantity be in order to minimize the total annual cost? Show your
work.
D-960
S-55
1-20%
CURRENT PRICE-19.20
Transcribed Image Text:The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 960 units, S= $5/order, and I= 20% of item price. Current price is $19.2 per unit (without any discount). Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost? Show your work Order Quantity 1 to 50 51 to 100 Price No discount 20% discount 40% discount o, 101 and up What should the order quantity be in order to minimize the total annual cost? Show your work. D-960 S-55 1-20% CURRENT PRICE-19.20
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