Scenario 11.4 - Caffeine and Sugar

question 92

Multiple Choice

Scenario 11.4 - Caffeine and Sugar
With a fixed cost of $100 per order,Nathan decided it was vital to get his money's worth.His monthly demand for energy drinks was 10,000 bottles and holding cost was estimated at 20% of unit cost.The mail order company offered him a couple of possibilities - he could pay $4.00 per bottle for orders of up to 10,000 bottles.After that threshold,he would pay only $3.98 per bottle,and if he ordered 20,00 or more bottles in an order,he would pay only $3.96 per bottle.
-What is the best order quantity for Nathan to use?

• A)5,477
• B)5,505
• C)10,000
• D)5,491

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Definitions:

Customer Preferences

This term refers to the tastes, choices, or selections that consumers make regarding products, services, or suppliers.

Components

Individual parts or elements that make up a larger system, machine, or assembly.

Aggregate Plan

A plan that includes forecast levels for families of products of finished goods, inventory, shortages, and changes in the workforce.

Master Production Schedule

A plan for individual commodities to be produced in each time period, serving as a link between production planning and manufacturing.