Lans Phonesmart sells 3,000 units of DTS telephone each year. Lan buys DTS phones from a supplier at $102 per unit. The ordering cost is $50 per order and the holding cost is estimated as 35% per year of the purchase price.
What is the EOQ?
What is the total cost, including annual purchase cost, for EOQ?
Lan told the supplier that she would like to change her order quantity to the EOQ you calculated in a. The supplier, however, prefers that she order 200 units each time and is willing to offer Lan a discount price if Lan agrees to do so. What is the maximum discounted price that would justify the order of 200 units for Luli? ( Hint: the price that would make the total cost equal to that of the EOQ?