Order quantity minimizes total annual inventory cost

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Reference no: EM131763739

Binary Choice sells laptops. Their supplier charges $50 per order and holding the cost of 200 per unit. They sell 50 computers a month. The manufacturer offered the following:

Order / Price per unit

< 11 $520

12-64 $500

65-128 $495

>128 $485

1. What order quantity minimizes total annual inventory cost?

2. The supplier made new offering they increase the shipping cost to $515 per computer but not charge for inventory or ordering cost, should they take the offer?

Reference no: EM131763739

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