Question: A supplier of MacoriX Inc., offers the following discounts according to the table below. Whenever an order is placed, a fixed ordering cost of $40 is incurred. Each unit of inventory costs 20% of the unit cost per year per dollar invested in inventory. The annual demand was estimated at 5,000unit.
a) What is the number of products that should be ordered, the total annual cost, and amount of orders per year?
b) If the company can only hold an average of 465 units, would your conclusions change? Explain.
|
Option
|
(Amount)
|
Per unit price
|
|
1
|
0-425
|
$10
|
|
2
|
426-475
|
$9
|
|
3
|
>475
|
$8
|