The supplier Sony Electronics uses (in Problem 1 of this homework) produces a new and updated price

  1. The supplier Sony Electronics uses (in Problem 1 of this homework) produces a new and updated price list based on increased order quantities. The following list shows the new prices:

    Order Quantity Unit Price per Circuit Card
    1-499 $300.00
    500 – 999 $297.00
    1000 – 1499 $294.00
    1500 – 1999 $291.00
    2000+ $290.00

    What is the annual total cost if the unit price is $294?

    Hint: First, you need to calculate the corresponding EOQ.

    Then, check if the EOQ is smaller than their lower bounds.

    If it does, the best order quantity choice is the lower bound in the feasible region, not EOQ.

    $8,882,100

    $8,796,100

    $8,966,635.69

    $8,807,475

 
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