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A local manufacturer uses 2,000 electronic switches boxes a year. Carrying costs are 23% of the cost...

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General Management

A local manufacturer uses 2,000electronic switches boxes a year. Carrying costs are 23% of thecost of the switch per year, and ordering costs are $15 per order.The following price schedule applies. What is the optimal orderquantity? Show all total costs calculations and explain youranswer.

Number ofSwitches              Price per Switch

0 -99                                         $17.50

100 -999                                    $17.00

1000 or more    $16.50

Answer & Explanation Solved by verified expert
3.9 Ratings (571 Votes)
DEMAND 2000 ORDERING COST 15 HOLDING COST 23 EOQ SQRT2 D S H WHERE D DEMAND S ORDERING COST H HOLDING COST ANNUAL HOLDING COST Q 2 H ANNUAL ORDERING    See Answer
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