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Determine the optimal order quantities for the company

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Reference no: EM133010739

Question - The annual demand for the three computer models "PC 1", "PC 2" and "PC 3" available on the market by an electronics retailer is R1 = 18,000, R2 = 1,800 and R3 = 180 pieces respectively. The supply of each model costs the company € 500, ie C1 = C2 = C3 = € 500. Every time an order is placed there is a fixed shipping cost of € 6,250. For each model ordered and delivered with the same truck there is an additional fixed cost of unloading and storage equal to 250 €, s1 = s2 = s3 = 250 €. The annual stock maintenance cost for all 3 models is equal to h = 20%. Determine the optimal order quantities for the company if the quantities are ordered and delivered independently per model. Also to determine the total annual cost of placing an order and maintaining stocks for all 3 products in total.

Reference no: EM133010739

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