The annual demand for an item is 40,000 units.The cost to process an order is $40 and the annual inventory holding cost is $3 per item per year.What is the optimal order quantity,given the following price breaks for purchasing the item?
a.What is the optimal behaviour?
b.Does the firm take advantage of the lowest price available? Explain.
Definitions:
Collective Delusion
A phenomenon where a group of people share and believe in a false or unfounded idea or belief.
Rationally Evaluating
The process of logically assessing something to form a judgment or conclusion.
Evidence
Reasons for believing that a statement or claim is true or probably true.
Confirmation Bias
The human tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.
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