Solution-What is the optimal order quantity

What is the optimal order quantity

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Question - Vostick Filter Company is a distributor of air filters to retail stores. It buys its filters from several manufacturers.

Filters are ordered in lot sizes of 1,000, and each order costs Php. 40 to place. Demand from retail stores is 20,000 filters per month, and carrying cost is Php. 0.10 a filter per month.

a. What is the optimal order quantity with respect to so many lot sizes (that is, what multiple of 1,000 units should be ordered)?

b. What would be the optimal order quantity if the carrying cost were cut in half to Php. 0.05 a filter per month?

c. What would be the optimal order quantity if ordering costs were reduced to Php. 10 per order?

Reference no: EM132960629

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What is the optimal order quantity

Reference no: EM132960629

Reference no: EM132960629

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