Bell Computers purchases integratod chips at $350 per chip The holding ost s35 p

Question

Bell Computers purchases integratod chips at $350 per chip The holding ost s35 per unit per year, the ordering cost is $121 per order, and sales are steady at 395 per month The companys supplier, Rich luCnip Manufacturing, Inc, deckdes to offer price concessions in order to attrect larger orders The pnce structure is shon below Rich Blue Chip's Price Struecture Quantity Purchased 1-89 units 100-199 unils Price/Unit S350 5325 $300 or more units a w hat is lhe mos cost effective order quantit and is minimum annual u s or el orn uters o older purchase, nd hold hese rite rated thips. us ng he ala and discoun cticices provided and using ? xed hong cost? he most cost. ettective order quanty (assuming tney take the most cost ettective dis.count, and use a tixed holding cost sunits(enter your response as e whoie number) At the chosen level of quantity discount, and using the fixed hoiding cost. what is the tolal annual cost for Bell computers to arder, purchase, and hoid the integrated chips royour resonse to the nsarest whole number) b) Bell Com puters wishes o recalculate usin 10% ho ng cost rather than he xed S35 hold ng cost in parta. hat is te most cost effective order quantity, and what is the corresponding a nnual cost? Ine most cost ettective order quanty (assuming they take the most cos-ettecte ascount, and use a percentrage-ot-pnce hoiding cost) is units (enter your response as a whole numbery At the chosen level of quantity discount, and using the percentage of price holding cost, what is the total annual cost for Bell computers to order, purchase, and hold the integrated chips sond your responss to the nearsst whole number).

Explanation / Answer

A.

So using now:

the table

Hence we have :

B.

Now h has changed and is a function of P.

d monthly demand 395 D Annual demand 4740 P Price 350 h Holding cost 35 k ordering cost 121 Q Optimal Q (sqrt(2*K*D/h) 181

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