Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Please solve "The total annual cost for Bell computers to order, purchase, and hold the integrated chips is $_____ (round your response to the nearest whole number)." It is located on the attached image. Thank you.

Bell Computers purchases integrated chips at $350 per chip. The holding cost is $36 per unit per year, the ordering cost is
$121 per order, and sales are steady at 395 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides
to offer price concessions in order to attract larger orders. The price structure is shown below.
Rich Blue Chip's Price Structure
Quantity Purchased
Price/Unit
$350
$325
$300
1-99 units
100-199 units
200 or more units
a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these
integrated chips?
The optimal order quantity after the change in pricing structure is 179 units (enter your response as a whole number).
The total annual cost for Bell computers to order, purchase, and hold the integrated chips is $
(round your response to
the nearest whole number).
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Transcribed Image Text:Bell Computers purchases integrated chips at $350 per chip. The holding cost is $36 per unit per year, the ordering cost is $121 per order, and sales are steady at 395 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below. Rich Blue Chip's Price Structure Quantity Purchased Price/Unit $350 $325 $300 1-99 units 100-199 units 200 or more units a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips? The optimal order quantity after the change in pricing structure is 179 units (enter your response as a whole number). The total annual cost for Bell computers to order, purchase, and hold the integrated chips is $ (round your response to the nearest whole number).
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