Determine what order quantity is optimal

Assignment Help Finance Basics

Reference no: EM1354429

Lott Manufacturing Inc. has been ordering parts for its production process in lots of 10,000 units. Each order costs the firm $50 to place, and holding costs per unit average $3. Lott uses 200,000 units every 250 days.

Lott Manufacturing was recently approached by its supplier with a new quantity discount program. The supplier offered the following quantity discounts.

Quantity Cost per unit
0-1,999 $5.00
2,000-3,999 4.99
4,000-5,999 4.98
6,000-7,999 4.97
8,000-9,999 4.96
10,000+ 4.95

What order quantity is optimal for Lott to place considering the quantity discounts?

Reference no: EM1354429

Questions Cloud

Important components of an organizational theory : Important Components of an Organizational Theory - Describe and discuss what organizational theory is, as well as the two important components of it.

Interpreting the regular expressions as languages : Show that the following identities hold for regular expressions over any alphabet: epsilon + R*R = R*. These should be done by interpreting the regular expressions as languages.

Sufficient and competent evidence for auditors : What constitutes sufficient and competent evidence? What types of factors should an auditor consider when determining definitions of competency? The answers will be provided here.

Features of successful organizational training : Explain why is training an important requirement for organizations to undertake and have you participated in organizational training, and if so, do you feel that it was successful?

Determine what order quantity is optimal : Lott Manufacturing Corporation has been ordering parts for its production process in lots of 10,000 units. Each order costs the company $50 to place, and holding costs per unit average $3.

Computing adjusted cash balance per bank : At July 31, Kuhlmann Company has the following bank information: cash balance per bank $8,069, outstanding checks $856, deposits in transit $1,500, and a bank service charge $26. Determine the adjusted cash balance per bank at July 31.

Basic cognitive impairment disorders : Discuss basic cognitive impairment disorders. Include the areas in which some people are more vulnerable than others. Also include signs and symptoms as well as causative factors.

Determine the linear speed of the dragster : Which vector would return the hiker to the starting point? All angles are measured in a counter-clockwise direction from the positive x-axis.

Organizational purchase situations : Organizational Purchase Situations - Compare and contrast the organizational purchase situations of straight rebuy

User Account

All Pages