Acme Distributors has an annual demand for an airport metal detector of 1,275 units. The cost of a typical detector to Acme is $355. Carrying cost is estimated to be 15% of the unit cost, and the ordering cost is $35 per order. If Karen Powell, the owner, orders in quantities of 340 or more, she can get a 5% discount on the cost of the detectors. a. What is the optimal order quantity, given the following price breaks for purchasing the item? 17.15 b. What price should Acme pay per unit? $ 355.00 c. What is the total cost at the optimal behavior? $ 438,724.88

Acme Distributors has an annual demand for an airport metal detector of 1,275 units. The cost of a typical detector to Acme is $355. Carrying cost is estimated to be 15% of the unit cost, and the ordering cost is $35 per order. If Karen Powell, the owner, orders in quantities of 340 or more, she can get a 5% discount on the cost of the detectors. a. What is the optimal order quantity, given the following price breaks for purchasing the item? 17.15 b. What price should Acme pay per unit? $ 355.00 c. What is the total cost at the optimal behavior? $ 438,724.88

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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