Course Solutions Uncategorized (Answered) : Question 1 Yet Answered Marked 2500 Flag Question Manager Received New Price List Boxes Su Q33140962

(Answered) : Question 1 Yet Answered Marked 2500 Flag Question Manager Received New Price List Boxes Su Q33140962

Question 1 Not yet answered Marked out of 25.00 Flag question A manager just received a new price list for boxes from a supplier. It will now cost $1.00 a box for order quantities of 801 or more, $1.10 a box for 200 to 800, and $1.20 a box for smaller quantities. Ordering cost is $40 per order and holding cost rate is 40 percent of unit cost per year. The company uses 3,600 boxes a year. The manager has suggested a round number order quantity of 800 boxes. The managers rationale is that total annual inventory cost is U-shaped and fairly flat at its minimum Therefore, the difference in total annual cost between 800 and 801 units would be small anyway. What order quantity would you recommend? (Round your answer to the nearest whole number.) Answer:Question

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