Multiple Choice
Assume that annual demand for a part is 40,000 units,the ordering cost is $5 per order and the annual holding cost of carrying inventory in stock is 10% of the cost of the unit.A quantity discount will reduce the unit price from $5.00 for an order placed between 0 to 2,499 units to $4.95 for an order of the size of 2,500 units or more.Using a price-break inventory model,which of the following is the optimal order quantity?
A) 894 units
B) 899 units
C) 2,499 units
D) 2,500 units
E) 2,709.4 units
Correct Answer:
Verified
Correct Answer:
Verified
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