A small refrigeration shop stocks up on electric motors from a catalog supplier located in the Midwest. The price of the motors varies depending on the quantity purchased; the price breaks are shown in the table. The refrigeration shop knows it will need around 600 motors for the coming season and that it will cost them about $40 to place an order. Storage cost for the motors is $10 each. In previous years they have bought all 600 at once and they are considering doing this again. What order quantity would you advise and how much can they save using your recommendation instead of their one order per year strategy?
$$\begin{array} { | l | c | }
\hline{ \text { Quantity } } & \text { Price/unit } \
\hline 1 - 49 & \$ 35.00 \
\hline 50 - 99 & \$ 34.00 \
\hline 100 - 499 & \$ 33.00 \
\hline 500 \text { or more } & \$ 30.00 \
\hline
\end{array}$$

Question

A small refrigeration shop stocks up on electric motors from a catalog supplier located in the Midwest. The price of the motors varies depending on the quantity purchased; the price breaks are shown in the table. The refrigeration shop knows it will need around 600 motors for the coming season and that it will cost them about $40 to place an order. Storage cost for the motors is $10 each. In previous years they have bought all 600 at once and they are considering doing this again. What order quantity would you advise and how much can they save using your recommendation instead of their one order per year strategy?
 $$\begin{array} { | l | c | } 
\hline{ \text { Quantity } } & \text { Price/unit } \
\hline 1 - 49 & \$ 35.00 \
\hline 50 - 99 & \$ 34.00 \
\hline 100 - 499 & \$ 33.00 \
\hline 500 \text { or more } & \$ 30.00 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of A small refrigeration shop stocks up on electric motors from a catalog supplier located in the Midwest. The price of the motors varies depending on the quantity purchased; the price breaks are shown in the table. The refrigeration shop knows it will need around 600 motors for the coming season and that it will cost them about $40 to place an order. Storage cost for the motors is $10 each. In previous years they have bought all 600 at once and they are considering doing this again. What order quantity would you advise and how much can they save using your recommendation instead of their one order per year strategy?
 $$\begin{array} { | l | c | } 
\hline{ \text { Quantity } } & \text { Price/unit } \
\hline 1 - 49 & \$ 35.00 \
\hline 50 - 99 & \$ 34.00 \
\hline 100 - 499 & \$ 33.00 \
\hline 500 \text { or more } & \$ 30.00 \
\hline
\end{array}$$

A Small Refrigeration Shop Stocks Up on Electric Motors from a Catalog