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Demand is 5000 units per year ordering costs are $100 per order and the basaic unit price is $5. carrying costs are 20% per annum. discounts are...

Demand is 5000 units per year ordering costs are $100 per order and the basaic unit price is $5. carrying costs are 20% per annum. discounts are available thus:

1200 -1399 less 10%

1400 - 1499 less 15%

1500 and over less 20%

what is the most economical quantity to order?


A compan yuses a special bracket in the manufacturre of its products which it orders from outside suppliers. the appropriate data are:


demand =2000 per annum

order cost = $20 per order

carrying cost = 20% of item price

Basic item price = 10 per bracket


The company is offerred the follosing discounts on the basic price:


For order quantity 400-799 lesss 2%

800-1599 less 4%

1600 and over less 5%


youare required to establish the most economical quantity to order.

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