As an Inventory Manager,you Must Decide on the Order Quantity

question 24

Essay

As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 1,000 units.Ordering costs are $50 each time an order is placed,and the holding cost is 25 percent of the per-unit price.Your supplier provided the following price schedule.
$$\begin{array} { | c | c | } \hline \text { Quantity } & \text { Price per Unit } \\\hline 1 - 199 & \$ 10.00 \\200 - 499 & \$ 9.80 \\500 \text { or more } & \$ 9.60 \\\hline\end{array}$$
What ordering-quantity policy do you recommend?

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