A Local Post Office Uses 10,000 Boxes a Year

question 21

Essay

A local post office uses 10,000 boxes a year.Carrying costs are 15 cents per box a year,and ordering costs are $20 per order.The following price schedule applies.What is the optimal order quantity?
$$\begin{array} { l c } \text { Number of Boxes } & \text { Price per Box } \\0 - 199 & \$ 1.50 \\200 - 299 & \$ 1.25 \\300 - 399 & \$ 1.10 \\400 \text { or more } & \$ 1.00\end{array}$$

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Definitions:

Forward Logistics

The management and process of moving goods from the point of production to the point of sale, encompassing transportation, warehousing, and delivery to end consumers.

Manufacturer

A company or entity that produces finished goods from raw materials in a process known as manufacturing.

Sustainability Programs

Initiatives aimed at promoting environmental, economic, and social well-being for the present and future, focusing on reducing negative impacts and conserving resources.

Supply Chain Members

The entities involved in the production, handling, and distribution process of a product, from raw materials to end customers.