Assignment:
Stephanie's Baskets sells wicker baskets at home parties. Stephanie sells 120 baskets/year, carries an ordering cost of $20/order, and an annual holding cost of 25. She currently orders 25 baskets at a time without using discounts. She has the opportunity to purchase at a discount. Given the following pricing sheet, what quantity do you recommend?
DC Category Order Size Discount (%) Unit Cost
1 0-49 0 $30.00
2 50-99 5 $28.50
3 100 or more 10 $27.00
Q1. What order quantity do you recommend?
Q2. Using this solution, how many times will the owner need to reorder baskets?
Q3. Should Stephanie's Baskets take advantage of the discount?