Optimal order quantity and minimum annual cost

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Reference no: EM132262538

Bell Computers purchases integrated chips at ?$350 per chip. The holding cost is ?$33 per unit per? year, the ordering cost is ?$118 per? order, and sales are steady at 400 per month. The? company's supplier, Rich Blue Chip? Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below.

Rich Blue? Chip's Price Structure

Quantity Purchased ? Price/Unit ?

1-99 units ? $350 ?

100-199 units ? $325

200 or more units ? $300 ?

a) What is the optimal order quantity and the minimum annual cost for Bell Computers to? order, purchase, and hold these integrated? chips?

The optimal order quantity after the change in pricing structure is ______ units ?(enter your response as a whole ?number). The total annual cost for Bell computers to? order, purchase, and hold the integrated chips is ?$nothing ?(round your response to the nearest whole? number). ?

b) Bell Computers wishes to use a 10?% holding cost rather than the fixed ?$33 holding cost in part a. What is the optimal order? quantity, and what is the optimal annual? cost?

The optimal order quantity after the change in the holding cost calculation is ______ units ?(enter your response as a whole ?number).

The total annual cost for Bell computers to? order, purchase, and hold the integrated chips is ?$______ ?(round your response to the nearest whole? number).

Reference no: EM132262538

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