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Royal Glass Inc. produces window glass and is making a special type of glass with a sun filter using new and recycled glass as raw materials. The company produces the glass in batches of 500 pieces and the budgeted sale for the current year is 6.000 pieces of glass. The company produces the glass in various combinations of new and recycled glass. Royal Glass can buy new glass for a price per kilo of 250.00 DKK and recycled glass for a price per kilo of 149.00 DKK. Royal Glass receives a discount on 10% on purchasing of new glass on orders with a minimum of 10,000 kg new glass (no discount on recycled glass). All purchased glass, new as well as recycled is used for production in order not to have raw materials on inventory. Though, in case of inventory of finished glass (not raw materials) the financial department has estimated the cost of inventory to be 12% of the inventory value. The possible combinations of new and recycled glass used for producing one piece of glass with sun-filter are as follows: Recycled glass (kg) 6.5 6.15 5.75 5.65 5.4 5.1 4.5 4.1 3.8 4.0 New glass (kg) 1.1 1.25 1.5 1.6 1.8 2.0 2.3 2.8 3.4 4.8 Required A. Calculate the optimal combination of new and recycled glass to minimize average production cost per piece of glass with sun-filter? B. Should the manager use the option of 10% discount for ordering more than 10,000 kg new glass? Explain your answer. C. All Royal Glass's overhead cost is allocated to the production department based on the amount of recycled glass used in the production. One kilo (kg) of recycled glass is charged with 30.00 DKK. Does this cost change the optimal combination of new and recycled glass

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