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skypeaches skypeaches
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5 years ago
An office manager uses 400 boxes of file folders per year. The price is $8.50 per box for an order size of 199 boxes or less, $8.00 per box for orders of 200 to 799 boxes, and $7.50 per box for an order of 800 or more boxes. Carrying cost is 20 percent of the price of the product and ordering costs are $80. What order quantity minimizes total annual cost?
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Introduction to Management Science

Introduction to Management Science


Edition: 13th
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wrote...
5 years ago
Optimal Q = 194. TC(194) = $3730; TC(200) = $3520; TC(800) = $3640, so order 200.
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