(Answered) With a fixed cost of 100 per order nathan decided it was

Management Studies

With a fixed cost of $100 per order, Nathan decided it was vital to get his money's worth. His monthly demand for energy drinks was 10,000 bottles and holding cost was estimated at 20% of unit cost. The mail order company offered him a couple of possibilities -

The marginal unit discount pricing schedule is:

Order Quantity	Marginal Unit Price
0-10,000	C0 = 4.00
10,000-20,000	C1 = 3.98
Over 20,000	C2 = 3.96

1) What is the best order quantity for Nathan to use? Answer:

2) What is the best total cost that Nathan can incur? Answer:

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