Answered: . Determine an order quantity that will…

. Determine an order quantity that will minimize total cost. What is the Total Cost at the feasible solution. Round your answer to the nearest ten dollars.

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter15: Managing Short-term Assets

Section: Chapter Questions

Problem 19PROB

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Question

A manufacturer of exercise equipment purchases the pulley section of the equipment from a supplier who lists these prices: less than 1,000, $5 each; 1,000 to 3,999, $4.95 each; 4,000 to 5,999, $4.90 each; and 6,000 or more, $4.85 each. Ordering costs are $50, annual carrying costs per unit are 40 percent of purchase cost, and annual usage is 4,900 pulleys. Determine an order quantity that will minimize total cost.

What is the Total Cost at the feasible solution. Round your answer to the nearest ten dollars.

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