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