Problem
Each year Apu's Kwik-E-Mart sells 15,000 cases of soda. The company is trying to determine how many cases of soda should be ordered each time an order is placed with the supplier. It costs $20 to process each order, and the cost of carrying a case of soda in inventory for one year is $3. The supplier offers Apu the schedule of quantity discounts shown in the following table. Each time an order is placed, how many cases should Apu order? Explain the optimal solution.
|
Number of cases ordered
|
Price ($/case)
|
|
1-499
|
6.50
|
|
500-999
|
6.40
|
|
1,000-4,999
|
6.30
|
|
5,000 or more
|
6.20
|