Managing Operations Across the Supply Chain 1st Edition by Morgan Swink,Steven Melnyk,Bixby Cooper, Janet Hartley

Exercise 1

A company experiences annual demand of 1,000 units for an item that it purchases.The rate of demand per day is very stable, with very little variation from day to day.The item costs $50 when purchased in quantities less than 100, $48 for 100 or more.Ordering costs are $40 and the carrying cost is 25%.How much should the company buy each time an order is placed?