The Tiernan Gallery and Art Museum distributes to its visitors a printed guide t
ID: 444488 • Letter: T
Question
The Tiernan Gallery and Art Museum distributes to its visitors a printed guide to its collections. There are about 18,000 visitors per year. Holding costs for the brochures are 24% and it costs $25 to place an order with the printer. The printer has offered the following discount schedule: Category Order Size Unit Cost 1 0 - 1499 $2.50 2 1500 - 2999 $2.20 3 3000 or more $1.80 How many brochures should be printed at a time?
Category Order Size Unit Cost 1 0 - 1499 $2.50 2 1500 - 2999 $2.20 3 3000 or more $1.80
Explanation / Answer
Visitors =18000 per year
Holding cost =24%
it costs 25 dollars
Unit cost 0-1499 = 2.50 dollars
Unit cost 1500-2999 = 2.20 dollars
Unit cost 3000 or more = 1.80 dollars
As the visitors are 18000 per year, it is better if they order the brochures to be printed in bulk that is more than 3000 .
If they go for printing the brochures i.e.. below 3000 and below 1500 then the cost to print the brochures will become high.
So, it is good to go for printing 3000 brochures at a time as the cost incurred is less when compared to other two options
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