A company uses 6,000 widgets a year. Order costs are $75 and carrying costs are 30 percent of the purchase price. The price breakdown is as follows:
1 - 999 $0.90
1,000 – 2,9999 $0.88
3,000+ $0.86
Calculate the order quantity and use that information to answer the questions that follow.
1. What is the Q value for the 1 – 999 price category before it is adjusted for feasibility?
Round your answer to a whole number.
2. What is the Q value for the 1,000 – 2,999 price category before it is adjusted for feasibility? Round your answers to a whole number.
3. What is the Q value for the 3,000+ price category before it is adjusted for feasibility? Round your answers to a whole number.
4. What is the feasible Q value for the 1 – 999 price category? Round your answer to a whole number.
5. What is the feasible Q value for the 1,000 – 2,999 price category? Round your answer to a whole number.
6. What is the feasible Q value for the 3,000+ price category? Round your answer to a whole number.
7. What is the total cost for the 1 – 999 price category? Round your answer to a whole number.
8. What is the total cost for the 1,000 – 2,999 price category? Round your answer to a whole number.
9. What is the total cost for the 3,000+ price category? Round your answer to a whole number.
10. Based on your calculations, what is the order quantity that minimizes cost?