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Unformatted text preview: TC 100 = EXAMPLE 6 Surge Electric uses 4,000 toggle switches a year. Switches are priced as follows: 1 to 499, 90 cents each; 500 to 999, 85 cents each; and 1,000 or more, 80 cents each. It costs approximately $30 to prepare an order and receive it, and carrying costs are 40 percent of purchase price per unit on an annual basis. Determine the optimal order quantity and the total annual cost. SOLUTION D = S = H = .40 P Find the minimum point for each price, starting with the lowest price, until you locate a feasible minimum point....
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- Spring '08
- $4, optimal order quantity