A Manager Has Just Received a Revised Price Schedule from a Vendor

question 92

Essay

A manager has just received a revised price schedule from a vendor. What order quantity should the manager use in order to minimize total costs? Annual demand is 120 units, ordering cost is $10, and annual carrying cost is $1 per unit.
$$\begin{array} { | c | c | } \hline \text { Quantity } & \text { Unit Price } \\\hline 1 - 59 & \$ 15 \\\hline 60 - 99 & \$ 14 \\\hline 100 \text { or more } & \$ 13 \\\hline\end{array}$$

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Definitions:

Sales Promotion

A marketing strategy designed to increase sales temporarily by offering incentives or discounts to consumers or traders.

Promotion Alternatives

Different strategies and methods used by businesses to communicate the value of a product or service to the customers, aiming to increase sales.

Advertising

The process or job of creating content to advertise the sale of business goods or services.

Feedback Loop

A process in which the outputs of a system are circled back and used as inputs, often for the purpose of enhancing operations or improving future performance.