Determine order quantity to minimize total cost

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Reference no: EM13105710

Estimated demand for gold-filled lockets at Sam's Bargain Jewelry and Housewares is 2,800 lockets a year. Manager Veronica Winters has indicated that ordering cost is $40, and that the following price schedule applies: 1 to 699 lockets, $.90 each; 700 to 1,399 lockets, $.80 each; and 1,400 or more, $.75 each. Carrying cost is $0.18 per locket on an annual basis. What order quantity will minimize total cost?

Reference no: EM13105710

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