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What is the best order quantity for nathan to use

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Reference no: EM131314568

With a fixed cost of $100 per order, Nathan decided it was vital to get his money's worth. His monthly demand for energy drinks was 10,000 bottles and holding cost was estimated at 20% of unit cost. The mail order company offered him a couple of possibilities -

The marginal unit discount pricing schedule is:

Order Quantity

Marginal Unit Price

0-10,000

C0 = 4.00

10,000-20,000

C1 = 3.98

Over 20,000

C2 = 3.96

1) What is the best order quantity for Nathan to use? Answer: 

2) What is the best total cost that Nathan can incur? Answer:

Reference no: EM131314568

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