Course Solutions Uncategorized (Answered) : Climat Co has been buying a chemical water conditioner for its bait (to help keep its baitfish alive) in an optimal fashion usin

(Answered) : Climat Co has been buying a chemical water conditioner for its bait (to help keep its baitfish alive) in an optimal fashion usin

Climat Co has been buying a chemical water conditioner for its bait (to help keep its baitfish alive) in an optimal fashion using EOQ analysis. The supplier has now offered ZZZ a discount based on the quantity purchased (prices and quantity ranges can be found in the table below). Current data for the problem are: D = 200 units per year; S = $20.00, I = 20% per year.

(a) What is the optimal order quantity?

(b) What are the annual total cost, including product cost, of continuing their current behavior?

Range 1

Range 2

Range 3

Quantity

1 – 59

60 – 179

≥ 180

Unit Price, P

$5.00

$4.75

$4.50

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