Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year.Manager Veronica Winters has indicated that ordering cost is $45,and that the following price schedule applies:
1 to 599 lockets,$.90 each; 600 to 1,199 lockets,$.80 each; and 1,200 or more,$.75 each.What order size will minimize total cost in each of these cases:
(i)Holding cost is $.18 per locket on an annual basis.
(ii)Holding cost is 20 percent of price on an annual basis.

Question

Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year.Manager Veronica Winters has indicated that ordering cost is $45,and that the following price schedule applies:
 1 to 599 lockets,$.90 each; 600 to 1,199 lockets,$.80 each; and 1,200 or more,$.75 each.What order size will minimize total cost in each of these cases:
(i)Holding cost is $.18 per locket on an annual basis.
(ii)Holding cost is 20 percent of price on an annual basis.

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The Answer of Estimated demand for gold-filled lockets at Sam's Bargain Jewellery and Housewares is 2,420 lockets a year.Manager Veronica Winters has indicated that ordering cost is $45,and that the following price schedule applies:
 1 to 599 lockets,$.90 each; 600 to 1,199 lockets,$.80 each; and 1,200 or more,$.75 each.What order size will minimize total cost in each of these cases:
(i)Holding cost is $.18 per locket on an annual basis.
(ii)Holding cost is 20 percent of price on an annual basis.

Estimated Demand for Gold-Filled Lockets at Sam's Bargain Jewellery and Housewares