Rusk corporation sells 185000 gallons of paint annually at, Ask an Expert

Finance

Rusk Corporation sells 185,000 gallons of paint annually at several retail outlets. The ordering cost per order is $75, and its cost of capital is 10%. The storage and handling cost for paint is $2 per year, based on average inventory. Rusk buys the paint from the manufacturer according to the following price schedule: 1 - 999 gallons at $11 per gallon, 1000 - 9999 gallons at $10 per gallon, and 10,000 gallons and over at $9 per gallon.

(A) Find the optimal order quantity for Rusk. 10,000 gallons

(B) For this optimal order size, what is the total annual cost of paint? $1,680,888

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91618707

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