Economical order quantity and considering quantity discounts

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Reference no: EM13965540

Golden Valley Cannery uses 64,000 size 7X cans annually and can purchase any quantity up to 10,000 cans at $.040 per can. At 10,000 cans the unit cost drops to $.032 per can, and for purchases of 30,000 it is $.030 per can. The costs of ordering are $24 per order, and interest costs are 20 percent of the price per can and apply to the average inventory. Storage costs are $.02 per can-year and are based upon maximum inventory. (Disregard safety stock costs)

What is the EOQ, disregarding the quantity discounts?

What is the most economical order quantity, considering the quantity discounts?

Reference no: EM13965540

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