Practical Management Science
Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Problem 20-39 (Algo)
CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to
meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other
data for the problem:
Price of copper
0.80 per pound up to 2,499 pounds
0.79 per pound for orders between 2,500 and 4,999 pounds
%24
0.77 per pound for orders 5,000 pounds or greater
51,000 pounds per year
30 percent per unit per year of the price of the copper
Annual demand
Holding cost
Ordering cost
30
Which quantity should be ordered?
Quantity
pounds
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Transcribed Image Text:Problem 20-39 (Algo) CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem: Price of copper 0.80 per pound up to 2,499 pounds 0.79 per pound for orders between 2,500 and 4,999 pounds %24 0.77 per pound for orders 5,000 pounds or greater 51,000 pounds per year 30 percent per unit per year of the price of the copper Annual demand Holding cost Ordering cost 30 Which quantity should be ordered? Quantity pounds
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