What is the best ordering policy for the item

Reference no: EM131413716

Annual demand for an item is 2,000 units, each order costs £10 to place and the annual holding cost is 40% of the unit cost. The unit cost depends on the quantity ordered as follows:

· for quantities less than 500, unit cost is £1

· for quantities between 500 and 1,000, unit cost is £0.80

· for quantities of 1,000 or more, unit cost is £0.60.

What is the best ordering policy for the item?

Reference no: EM131413716

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