A firm is able to obtain quantity discount on its order of material as follows:
|
Price per tonne Don't use plagiarized sources. Get Your Custom Essay on
the annual demand for the material is 4 000 tonne stock holding costs are 20 of mate 617163
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|
Tonne |
|
Rs. 6.00 |
Less than 250 |
|
Rs. 5.90 |
more than 250 and less than 800 |
|
Rs. 5.80 |
more than 800 and less than 2,000 |
|
Rs. 5.70 |
more than 2,000 and less than 4,000 |
|
Rs. 5.60 |
4,000 and over |
The annual demand for the material is 4,000 tonne. Stock holding costs are 20% of material cost per annum. The delivery cost per order is Rs. 6. You are required to calculate the best quantity to order.
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