Bell Computers purchases integrated chips at $35000 per chip The holding cost $3500 per unit per year, the ordering cost is $120 00 per order, and sales are
steady at 400 per month. The company's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders The price
structure is shown below.
Rich Blue Chip's Price Structure
Quantity Purchased
1-99 units
100-199 units
200 or more units
Price/Unit
S350
S326
S300
a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips?
units (enter your response as a whole number).
The optimal order quantity after the change in pricing structure is
The total annual cost for Bell computers to order, purchase, and hold the integrated chips is (round your response to the nearest whole number).
b) Bell Computers wishes to use a 10% holding cost rather than the fixed $35.00 holding cost in part a. What is the optimal order quantity, and what is the optimal
annual cost?
The optimal order quantity after the change in the holding cost calculation is units (enter your response as a whole number).
The total annual cost for Bell computers to order, purchase, and hold the integrated chips (round your response to the nearest whole number).
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