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Due to long standing relationship with your firm, the supplier has agreed to give you quantity discounts based on the number of units you procure from them. The ordering cost of the product is $4000 per order. The inventory carrying cost is $25 per unit per year. The annual demand for the product is estimated as 100,000 units.

The quantity discounts are 1 to 6000 units are $1500 per unit, 6001+ units are $1200 per unit.

What is the total cost for ordering this product from your supplier at optimal quantity?

a. $150,141,421

b. $150,197,653

c. $180,176,792

d. $120,141,668

e. None of the above

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92599733

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