Calculate the optimal order quantity

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Reference no: EM131039452

Office express sells office supplies to businesses on a membership basis only. The company delivers supplies directly to the purchaser as long as a minimum purchase of $100 is made. In order to encourage bulk orders, office express offers the following discount schedule on purchase quantity of boxes of paper. Dan's lumber has annual demand of 5,000 boxes of paper, and a setup cost of $10 per order and holding cost of 22 percent of the purchase price. Calculate the optimal order quantity? 1-100 boxes = $5 per box, 100-249 = $4.75 per box, 250-499 = $4.50 per box, 500 or more = $4.25 per box.

Reference no: EM131039452

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