As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 1,000 units.Ordering costs are $50 each time an order is placed,and the holding cost is 25 percent of the per-unit price.Your supplier provided the following price schedule.
$$\begin{array} { | c | c | }
\hline \text { Quantity } & \text { Price per Unit } \
\hline 1 - 199 & \$ 10.00 \
200 - 499 & \$ 9.80 \
500 \text { or more } & \$ 9.60 \
\hline
\end{array}$$
What ordering-quantity policy do you recommend?

Question

As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 1,000 units.Ordering costs are $50 each time an order is placed,and the holding cost is 25 percent of the per-unit price.Your supplier provided the following price schedule.
 $$\begin{array} { | c | c | } 
\hline \text { Quantity } & \text { Price per Unit } \
\hline 1 - 199 & \$ 10.00 \
200 - 499 & \$ 9.80 \
500 \text { or more } & \$ 9.60 \
\hline
\end{array}$$ 
What ordering-quantity policy do you recommend?

Quizplus · Accepted Answer

The Answer of As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 1,000 units.Ordering costs are $50 each time an order is placed,and the holding cost is 25 percent of the per-unit price.Your supplier provided the following price schedule.
 $$\begin{array} { | c | c | } 
\hline \text { Quantity } & \text { Price per Unit } \
\hline 1 - 199 & \$ 10.00 \
200 - 499 & \$ 9.80 \
500 \text { or more } & \$ 9.60 \
\hline
\end{array}$$ 
What ordering-quantity policy do you recommend?

As an Inventory Manager,you Must Decide on the Order Quantity