Determine the optimal order quantity for a purchased part

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Reference no: EM131798220

Determine the optimal order quantity for a purchased part having the following characteristics:

The annual demand is 20,000 units.

Cost of processing each purchase order is $22.

The Annual inventory carrying cost rate is 0.2.

The unit price schedule is:

For an order of 1 to 499 unties $3.00 each.

For an order of 500 to 1,999 units $2.95 each.

For an order of 2,000 or more $2.90 each.

Reference no: EM131798220

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