Problem
The milling bed screws necessary for each machine are produced by an outside supplier at a cost of $25 each.
5 screws are needed each production day.
The storage cost is 15%, while the cost to order is $25.
Assume work occurs 240 days per year.
If a 1.5% discount is given on orders of 500 or more, should the discount be taken?
Explain why or why not.
i. What is the POQ in Days between Orders at the non-discount rate?
ii. What is the POQ in EOQ Per Units Daily Demand at the discount rate?