ABC Communications Inc. purchases motherboards from Parasol Systems at the following price schedules: Order Quantity...
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ABC Communications Inc. purchases motherboards from Parasol Systems at the following price schedules:
Order Quantity Q Unit Price ($/board)
0<=Q<26 350
26<=Q<51 315
51<=Q 285
The demand of these motherboard at ABC is 14 boards per month. Order setup costs are $30, and inventory holding costs are based on a 20% annual interest rate.
- Find the optimal order size Q* and the corresponding total annual cost G(Q*) for ABC, if Parasol Systems offers an all-units discount schedule.
- Find the optimal order size Q* and the corresponding total annual cost G(Q*) for ABC, if Parasol Systems offers an incremental quantity discount schedule.
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