What is the optimal order quantity

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Assignment:

A clothing line sells out 67 men's bamboo & spandex shirts per month. A shirt, for an order quantity of 51-200 pcs, costs $6.50 each. The carrying cost is $24 per year. Shipping fee is $190 for 100-1000 shirts.

1. What is the optimal order quantity?

2. What is the reorder point?

3. If the ordering costs were $5 per order, how many units should be ordered at one time?

4. Referring to (a), suppose the company was offered a discount of $0.8 per unit by its supplier for an order of 201-1000 shirts, should it take the discount?

Reference no: EM133237287

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