Computing the optimal order quantity

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Reference no: EM131902045

Question: During this year, "El Choliseo" will house several music performances. Arena vending annually sells large quantities of soft drinks and beer in plastic cups. The local container cup manufacturer that supplies the cups in boxes of 100 has offered arena management the following discount price schedule for cups:

Order Quantity (boxes)	Price per Box ($)
2000-6999	47
7000-11,999	43
12,000-19,999	41
20,000+	38

The annual demand for cups is 2.3 million, the annual carrying cost per box of cups is $1.90, and ordering cost is $320. Determine the optimal order quantity and total annual inventory cost.

Reference no: EM131902045

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