Compute the optimal order quantity-annual purchase cost

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Steamy Speedboats has an annual demand for 1,500 speedboats. It's supplier offers quantity discounts to promote larger order quantities. The cost to place an order is $300, and the holding rate is 32 percent of the purchase cost. The purchase cost for each speedboat is based on the price schedule given below. Compute the (a) optimal order quantity, (b) annual purchase cost, (c) annual holding cost, (d) annual order cost, and (e) total annual inventory cost. Order Quantity Price per Unit ($) 1-50 18,500 51-100 18,000 101-150 17,400 151 and above 16,800 Please explain how you got the answers.

Reference no: EM132224791

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