M0110 - MBA 620 - Assigment No.4 - Do Tuan Anh

M0110 - MBA 620 - Assigment No.4 - Do Tuan Anh - total cost...

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M0110 – MBA 620 Assignment No.4 Student Name: Do Tuan Anh ID No.: D10269847 Problem No.2 : Mac-in-the-Box. Inc. The scanner manufacturer offers the following price structure to Mac-in-the-Box Order Quantity Price per Unit 0 to 11 $520 12 to 143 $500 144 or more $400 The quantity of these flat-bed scanners to be ordered to minimize total costs will be calculated as below: Find the first feasible EOQ, starting with the lowest price level ($400/unit): = = = ) 400 ( 16 . 0 300 ) 1200 ( 2 2 EOQ 400 H DS 106.066 units or 107 units ( infeasible ) A 107 units order actually costs $500.00 per unit, instead of the $400.00 per unit used in the EOQ calculation, so this EOQ is infeasible. Now try the $500/unit level: = = = ) 500 ( 16 . 0 300 ) 1200 ( 2 2 EOQ 500 H DS 94.868 units or 95 units ( feasible ) This quantity is feasible because it lies in the range corresponding to its price, P = $500.00. The first feasible EOQ of 95 does not correspond to the lowest price level. Hence, we must compare its
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Unformatted text preview: total cost with the price break quantities (11 and 144 units) at the variable price levels ($520.00 and $400.00) to find out the best quantities to be ordered. The total annual cost is calculated as following formula: ( 29 ( 29 PD S Q D H Q C + + = 2 ( 29 ( 29 = + + = ) 1200 ( 520 300 11 1200 )] 520 ( 16 . [ 2 11 11 C $657,184.873 ( 29 = + + = ) 1200 ( 500 ) 300 ( 95 1200 )] 500 ( 16 . [ 2 95 95 C $607,589.474 OAM – Assignment No.3 P a g e 1 /2 Prepared by: Do Tuan Anh ( 29 ( 29 = + + = ) 1200 ( 400 300 144 1200 )] 400 ( 16 . [ 2 144 144 C $487,108 The best purchase quantity is 144 units , which qualifies for the deepest discount OAM – Assignment No.3 P a g e 2 /2 Prepared by: Do Tuan Anh...
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M0110 - MBA 620 - Assigment No.4 - Do Tuan Anh - total cost...

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