Scribd Logo
Upload

Welcome to Scribd!

  • Quantity Discount Model - Activity

    Uploaded by

    jay-ar dimaculangan
    4 views4 pages
    The document describes a quantity discount model with three discount levels: 0-1,499 units at $10 per unit; 1,500-2,999 units at $9.60 per unit (4% discount); and 3,000+ units at $9.50 per unit (5% discount). Using data on demand, ordering costs, and holding costs, it calculates the optimal order quantity, unit price, annual costs, and total costs for each discount level. The optimal choice is determined to be ordering 1,500 units at $9.60 per unit for a total cost of $98,800.

    Original Description:

    Original Title

    Quantity Discount Model - Activity (5)

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document describes a quantity discount model with three discount levels: 0-1,499 units at $10 per unit; 1,500-2,999 units at $9.60 per unit (4% discount); and 3,000+ units at $9.50 per unit (5% discount). Using data on demand, ordering costs, and holding costs, it calculates the optimal order quantity, unit price, annual costs, and total costs for each discount level. The optimal choice is determined to be ordering 1,500 units at $9.60 per unit for a total cost of $98,800.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    4 views4 pages

    Quantity Discount Model - Activity

    Uploaded by

    jay-ar dimaculangan
    The document describes a quantity discount model with three discount levels: 0-1,499 units at $10 per unit; 1,500-2,999 units at $9.60 per unit (4% discount); and 3,000+ units at $9.50 per unit (5% discount). Using data on demand, ordering costs, and holding costs, it calculates the optimal order quantity, unit price, annual costs, and total costs for each discount level. The optimal choice is determined to be ordering 1,500 units at $9.60 per unit for a total cost of $98,800.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 4

    LEARNING TASK

    Quantity Discount Model

    QUANTITY DISCOUNT
    Discount
    Discount Number Discount Quantity Percentage Discount Price

    1 0 - 1,499 0 $ 10.00
    2 1,500 - 2,999 4% $ 9.60
    3 3,000 and above 5% $ 9.50

    Data
    Demand (units) 10,000.00
    Ordering Cost (S) $ 150.00
    The percentage of price
    ("I") to Calculate the
    Holding Cost 0.25

    Required:
    Using the data above, complete the tables below:

    Final Order
    Quantity
    Order Quantity (Adjusted)
    Q1* (EOQ) 1095 1095
    Q2* (Price Break 1) 1118 1500
    Q3* (Price Break 2) 1124 3000

    Annual
    Order Annual Product Annual
    Discount Number Unit Price Ordering
    Quantity Cost Holding Cost
    Cost

    1 $ 10.00 1095 $ 100,000.00 $ 1,369.31 $ 1,369.31


    2 $ 9.60 1500 $ 96,000.00 $ 1,000.00 $ 1,800.00
    3 $ 9.50 3000 $ 95,000.00 $ 500.00 $ 3,562.50
    Decision: Buy 1,500 units at $4.80 with a Total Cost of $98,800.
    Total Cost

    $ 102,738.61
    $ 98,800.00
    $ 99,062.50

    You might also like