The Annual Demand for an Item Is 10,000 Units

question 42

Essay

The annual demand for an item is 10,000 units. The cost to process an order is $75 and the annual inventory holding cost is 20% of item cost. What is the optimal order quantity, given the following price breaks for purchasing the item? What price should the firm pay per unit? What is the total annual cost at the optimal behaviour?
$$\begin{array} { | l | l | } \hline \text { Quantity } & \text { Price } \\\hline 1 - 9 & \$ 2.95 \text { per unit } \\\hline 10 - 999 & \$ 2.50 \text { per unit } \\\hline 1,000 - 4,999 & \$ 2.30 \text { per unit } \\\hline 5,000 \text { or more } & \$ 1.85 \text { per unit } \\\hline\end{array}$$

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Definitions:

Sensitive Caregiving

Providing responsive, attentive, and nurturing care that meets the emotional and developmental needs of children.

Cultural Adaptations

Modifications or changes in customs, beliefs, or practices among groups in response to environmental or social changes.

Easy Temperament

A temperament characterized by regularity in biological rhythms, the tendency to adapt easily to new experiences, and a general cheerfulness.

Secure Attachment

A type of attachment characterized by trust and a bond where individuals feel they can rely on their attachment figures for support during times of distress.