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Inventory management with quantity discounts

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Mr. David Mueller is a reseller of sports shoes. The supplier of shoes offers discounts depending on quantity ordered. Following are the discount slabs:
Order quantity Cost per shoe pair ($)
1-799 4.40
800-1199 4.00
1200+ 3.60

Mr. David needs to decide how many shoe pairs should be ordered to keep total cost minimum. He has developed following estimates.
Annual demand (D) = 25,000 pairs
Ordering cost (S) = $12.00
Carrying cost % per annum (I) = 15%

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The solution provides step by step directions including formulas to determine how many shoe pairs should be ordered.

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Inventory Management with Quantity Discounts
Mr. David Mueller is a reseller of sports shoes. The supplier of shoes offers discounts depending on quantity ordered. Following are the discount slabs
Order quantity Cost per shoe pair ($)
1-799 4.40
800-1199 4.00
1200+ 3.60

Mr. David needs to decide how many shoe pairs should ...

Purchase this Solution
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