What is the adjusted order quantity

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Reference no: EM133931807

Problem

A distributor of industrial equipment purchases specialized compressors for use in air conditioners. The regular price is $50, however, the manufacturer of this compressor offers quantity discounts per the following discount schedule:

Option Plan	Quantity	Discount
A	1 - 299	0%
B	300 - 1,199	0.25%
C	1,200+	1.25%

The distributor pays $64 each time it places an order with the manufacturer. Holding costs are negligible (none) but they do earn 5% annual interest on all cash balances (meaning there will be a financial opportunity cost when they put cash into inventory). Annual demand is expected to be 7,750 units. Get the instant assignment help.

When there is no quantity discount (Option Plan A, the first row of the schedule listed above), what is the adjusted order quantity?

Reference no: EM133931807

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