Quantity discount pricing scheme

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Reference no: EM134023458

Question

Demand for a popular garbage can at Ace Hardware is constant at 6,722 units per year. The holding cost is 16% of the unit purchase price per year. Each order incurs a fixed cost of $1,342. The supplier offers a quantity discount pricing scheme according to the schedule below. Order Quantity Unit Price Less than 1600 $19.87 At least 1600 but less than 3700 $19.65 At least 3700 $19.21 Compute the optimal order quantity for Ace Hardware considering the quantity discount scheme. Remember, you need to calculate multiple EOQ values at each price point. Round, keep, or eliminate potential solutions, and then compare remaining candidates. Enter the total annual cost (ordering holding procurement) associated with the optimal order quantity.

Reference no: EM134023458

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