A mail-order house uses 15,950 boxes a year. Carrying costs are 69 cents per box a...

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A mail-order house uses 15,950 boxes a year. Carrying costs are69 cents per box a year, and ordering costs are $100. The followingprice schedule applies.
Number of Boxes Price per Box
1,000 to 1,999 $1.40
2,000 to4,999 1.30
5,000 to9,999 1.20
10,000 ormore 1.15

a. Determine the optimal order quantity. (Roundyour answer to the nearest whole number.)

b. Determine the number of orders per year.(Round your answer to 2 decimal places.)

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3.6 Ratings (515 Votes)

Annual demandD 15950 units ordering costS 100 Holding costH 69 cents 069 For this problem we have to first calculate the common Economic order Quantity as the holding cost for all range is the sameSo the common EOQ sqrt See Answer

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Number of Boxes		Price per Box
1,000 to 1,999		$1.40
2,000 to4,999		1.30
5,000 to9,999		1.20
10,000 ormore		1.15