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Economic order quantity without the discount

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Reference no: EM132394436

Firm C's demand for a product is 60 units per month. Its supplier charges an ordering cost of $40 per order and $35 per unit with a 20% discount for orders of 100 units or more. Firm C incurs a 20% annual holding cost.

Calculate the economic order quantity without the discount.

Then calculate the economic order quantity with the discounted price.

What will be the change in Firm C's annual total cost (purchasing, holding, and ordering) if it decides to take advantage of the quantity discount?

Reference no: EM132394436

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