Task: Georgia Pacific offers the following discount schedule for its 4X8 ft. sheets of quality plywood.
|
Order
|
Unit Cost ($)
|
|
Less than 100 sheets
|
18.00
|
|
100 to 499 sheets
|
17.50
|
|
500 to 750 sheets
|
17.25
|
|
More than 750 sheets
|
17.00
|
Ace Lumber and Building Supply regularly stocks this product from Georgia pacific and has an annual demand of 1000 sheets. The carrying cost at Ace Lumber is 20% of product cost, and a cost of $45 is incurred with each order.
a. Determine the optimal order quantity for Ace Lumber.