Determine the number of orders per year

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A small mail-order company uses 16,000 boxes a year. Holding cost rate is 16 percent of unit cost per year, and ordering cost is $31 per order. The following quantity discounts are available.

Number of Boxes Price per Box

1,000 to 1,999 $1.40
2,000 to 4,999 $ 1.35
5,000 to 9,999 $1.30
10,000 or more $1.25

a. Determine the optimal order quantity.

Optimal order quantity = ? boxes

b. Determine the number of orders per year. (Round the final answer to 1 decimal place.)

No. of orders per year = ?

Reference no: EM132708157

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