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A food processing company uses 25,000 kg of corn flour every year. The quantity - discount price of corn flour is provided in the table below. Quantity (kg) Unit Price (Rs/kg) 1 - 749 70 750 - 1499 65 1500 and above 60 The order processing charges are Rs. 500/ order. The handling plus carry-over charge on an annual basis is 20% of the purchase price of the corn flour per kg. The optimal order quantity (in kg) is 1500 |
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Answer» A food processing company uses 25,000 kg of corn flour every year. The quantity - discount price of corn flour is provided in the table below.
The order processing charges are Rs. 500/ order. The handling plus carry-over charge on an annual basis is 20% of the purchase price of the corn flour per kg. The optimal order quantity (in kg) is
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