The operator of a concession at a downtown location estimates that he will sell 400 bags of circus peanuts during a month.Holding costs are 17 percent of unit price and ordering cost is $22.The price schedule for bags of peanuts is:
1 to 199,$1.00 each; 200 to 499,$.94 each; and 500 or more $.87 each.What order size would be most economical?

Question

The operator of a concession at a downtown location estimates that he will sell 400 bags of circus peanuts during a month.Holding costs are 17 percent of unit price and ordering cost is $22.The price schedule for bags of peanuts is:
 1 to 199,$1.00 each; 200 to 499,$.94 each; and 500 or more $.87 each.What order size would be most economical?

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The Answer of The operator of a concession at a downtown location estimates that he will sell 400 bags of circus peanuts during a month.Holding costs are 17 percent of unit price and ordering cost is $22.The price schedule for bags of peanuts is:
 1 to 199,$1.00 each; 200 to 499,$.94 each; and 500 or more $.87 each.What order size would be most economical?

The Operator of a Concession at a Downtown Location Estimates