Lott Manufacturing Inc. has been ordering parts for its production process in lots of 10,000 units. Each order costs the firm $50 to place, and holding costs per unit average $3. Lott uses 200,000 units every 250 days.
Lott Manufacturing was recently approached by its supplier with a new quantity discount program. The supplier offered the following quantity discounts.
Quantity Cost per unit
What order quantity is optimal for Lott to place considering the quantity discounts?© BrainMass Inc. brainmass.com June 22, 2018, 9:00 pm ad1c9bdddf
The discount is irrelevant in the computation of the economic order ...
The solution examines Lott Manufacturing quantity discounts.