Please show work Bell computers purchases integrated chips. The holding cost is
ID: 392874 • Letter: P
Question
Please show work
Bell computers purchases integrated chips. The holding cost is $37 per unit per year, the ordering cost is $118 per order and sales are steady at 395 per month. the company's supplier rich blue chip inc decides to offer price concessions in order to attract large orders. The price structure is shown below:
1-99 units $350
100-199 units $325
200 or more $300
the optimal order quantity after the change in pricing structure is?
the total annual cost for bells computers to order, purchase, and hold the integrated chips is?
ones Mocia Firefox https://www MGMT4333 FALL 2018 Homework: HW8 F18 (30 pts) Score: 0 of 1 pt 1of 2 (0 complete) HIN Score: 0%, 0012pt Problem 12.22 per chip. The holding cost is 537 per unilt per year , the ordering oost is $118 per order, and sales are seady at 335 per monh. The Bel Computers purchases integrated chips at $350 price concessions in order to atract larger orders. The price structure is shown below Rich Biue Chip's Price Sructure s) what is the opsinal onder quartity and tho mnium annual oost for Bol Computers to der, purchase. and 'old rese mystedchpo? The optimal order quantity aher the change in pricing structure is 200u your neaponse as a whole number The totail annual cost for Bell computers to order, purchase and hold the indegrated chips is 122433 roud your uponse to the earest whale n t Enter your answer in the edit fields and then cick Check Answer.Explanation / Answer
Demand (D) = 395*12 = 4740
Holding cost (H) = 37 $
Ordering cost (S) = 118 $
EOQ = sqrt(2*D*S/H) = sqrt(2*4740*118/37) = 173.9 Hence 174 units
Total cost = D/EOQ*S + EOQ/2*H + Price*D
For EOQ = 174, Price = 325
Total cost = 4740/174*118 + 174/2*37 + 325*4740 = 1,546,933 $
For EOQ = 200, Price = 300
Total cost = 4740/200*118 + 200/2*37 + 300*4740 = 1,428,497 $
Hence, Optimal quantity is 200 and Annual cost will be 1,428,497 $