Find the optimal order quantity

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Reference no: EM132746232

A manufacturer of engines is required to purchase 2400 casting per year. This requirement is assumed to be fixed and known. The manufacturer is given a lower price for quantity purchased within certain ranges.

The problem is to determine the optimal purchase quantity.

The following data are given:

Time period T = 12 months

Total demand R= 2400 units.

I =2%

Set up cost per procurement, C3 = Rs.350

K11 = Rs.10 0≤q≤500

K12 = Rs. 9.25 q≥500

Also if setup cost of procurement is 100 only find the optimal order quantity

Reference no: EM132746232

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