What order quantity minimizes total annual inventory cost

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Reference no: EM1385300

A computer company sells peripherals, like printers and scanners, with their new desktop and laptop computers.

Their source for printers charges $300 per order, and holding cost is 16% of the unit price.

They sell 100 printers per month. The manufacturer has offered the following price schedule.

What order quantity minimizes total annual inventory cost?

Order Quantity Price Per Unit
0 to 11 520
12 to 143 500
144 or more 400

Please provide detailed answer. Step by step and all the equations used, will be highly appreciated.

Reference no: EM1385300

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