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A company experiences annual demand of 2,340 units for an item that it purchases. The rate of demand per day is very stable, with very little variation from day to day. The item costs $36 when purchased in quantities less than 150 and $34 for 150 or more. Ordering costs are $26 and the carrying cost is 20 percent.

a. What will be the total costs for each alternative? (Round your intermediate calculations and final answers to the nearest dollar amount.)

b. How much should the company buy each time an order is placed?

c. How much the company can save by placing the order? (Round your answer to the nearest dollar amount.)

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93123559

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