How many bumper pairs should be ordered at time

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Reference no: EM132185450

An automobile manufacturer uses about 60,000 pairs of bumpers (front bumper and rear bumper) per year, which it orders from a supplier. The holding cost is about 20% percentage of the purchasing cost, and it costs $25.00 to place an order. The supplier offers a system of quantity discounts, as follows: order less than 300 pairs(<299), there is no discount and the cost for a pair is $150; order from 300 to 499 pairs, there is 4% discount; and order 500 or more pairs, there will be 10% discount. How many bumper pairs should be ordered at a time? And how did you arrive at this?

Reference no: EM132185450

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