The ace hardware store expects to sell 1500 electric, Ask an Expert

Management Studies

The Ace Hardware store expects to sell 1,500 electric garbage disposal systems in the coming year. Demand for this product is fairly stable over the year. It costs $20 to place an order for these systems and the company assumes a 20% annual holding cost on inventory. The following price structure applies to Ace’s purchase of this product:

0 to 499= $35 a unit

500 to 999= $33 a unit

1000+= $31 a unit

ie. if it orders 650, it pays $33 per system; and if it orders 1200, it pays $31 per system.

Formulate an equation with variables and constraints.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93087043

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