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maksim [4K]
3 years ago
10

Quantity Discount: Consider a quantity discount problem where the yearly demand for the product is 1,286 units, the ordering cos

t is $47, the annual holding cost is 35% of the purchase price, and the price depends on the quantity as follows: Quantity Ordered Purchase Price per unit 0 to 199 units $66 each 200 to 4,999 units $44 each 5,000 or more $33 each Calculate the EOQ for the quantity range of 0 to 199 units (round to a whole number).
Business
1 answer:
Nataly [62]3 years ago
3 0

Answer:

EOQ = 72 units

Explanation:

Annual demand D = 1,286 units

Ordering cost S = $47

Holding percentage I = 35%

So, 0 - 199 units, the unit cost is $66

EOQ = \sqrt{2DS/PI}

EOQ = \sqrt{(2 * 1286 * 47)/(66*0.35)}

EOQ = \sqrt{5233.07}

EOQ = 72.33998613

EOQ = 72 units

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