You have electronics store, and you are planning to buy headphones from china. The supplier in china offers you three different prices for the same headphone. The discount you will get is based on the quantity you order. Below is quotation from the supplier. PRICE RANGE QUANTITY ORDERED Headphone Price Initial price 0 to 999 $200 Discount price 1 999 to 1999 $150 Discount price 2 2000 and above $100 Annual Headphone Demand (Units) = 20000 Ordering or Setup Cost per Order ($) = 1000 holding cost percentage of unit price = 5% What should the order quantity be in order to minimize the total annual cost?
You have electronics store, and you are planning to buy headphones from china. The supplier in china offers you three different prices for the same headphone. The discount you will get is based on the quantity you order. Below is quotation from the supplier. PRICE RANGE QUANTITY ORDERED Headphone Price Initial price 0 to 999 $200 Discount price 1 999 to 1999 $150 Discount price 2 2000 and above $100 Annual Headphone Demand (Units) = 20000 Ordering or Setup Cost per Order ($) = 1000 holding cost percentage of unit price = 5% What should the order quantity be in order to minimize the total annual cost?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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You have electronics store, and you are planning to buy headphones from china. The supplier in china offers you three different prices for the same headphone. The discount you will get is based on the quantity you order.
Below is quotation from the supplier.
|
PRICE RANGE |
QUANTITY ORDERED |
Headphone Price |
|---|---|---|
|
Initial price |
0 to 999 |
$200 |
|
Discount price 1 |
999 to 1999 |
$150 |
|
Discount price 2 |
2000 and above |
$100 |
Annual Headphone Demand (Units) = 20000
Ordering or Setup Cost per Order ($) = 1000
holding cost percentage of unit price = 5%
What should the order quantity be in order to minimize the total annual cost?
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