You are in the process of deciding the optimal order quantity of shampoo packs for a hotel. The supplier charges you $47 per order and your stockroom costs approximately $0.69 per shampoo pack per year to store the product. Based on prior research, you were able to determine that the hotel goes through approximately 94 shampoo packs per day. They hold 0 safety stock. The supplier is willing to give the following quantity discounts for the product. Using the order quantity that will minimize total cost, what is the total annual cost? Quantity 1 - 1499 Answer: 1500 - 3999 4000- -7999 8000+ Price Check $2.25 $2.10 $2.05 Note: Round your answer to 2 decimal places. Do NOT include $ sign or a comma. For example, answer like 50246 and NOT $50,246 $2.03

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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You are in the process of deciding the optimal order quantity of shampoo
packs for a hotel. The supplier charges you $47 per order and your stockroom
costs approximately $0.69 per shampoo pack per year to store the product.
Based on prior research, you were able to determine that the hotel goes
through approximately 94 shampoo packs per day. They hold 0 safety stock.
The supplier is willing to give the following quantity discounts for the product.
Using the order quantity that will minimize total cost, what is the total annual
cost?
Quantity
1 - 1499
$2.25
$2.10
$2.05
$2.03
Note: Round your answer to 2 decimal places. Do NOT include $ sign or a
comma. For example, answer like 50246 and NOT $50,246
Answer:
1500 - 3999
4000 - 7999
8000+
Price
Check
Transcribed Image Text:You are in the process of deciding the optimal order quantity of shampoo packs for a hotel. The supplier charges you $47 per order and your stockroom costs approximately $0.69 per shampoo pack per year to store the product. Based on prior research, you were able to determine that the hotel goes through approximately 94 shampoo packs per day. They hold 0 safety stock. The supplier is willing to give the following quantity discounts for the product. Using the order quantity that will minimize total cost, what is the total annual cost? Quantity 1 - 1499 $2.25 $2.10 $2.05 $2.03 Note: Round your answer to 2 decimal places. Do NOT include $ sign or a comma. For example, answer like 50246 and NOT $50,246 Answer: 1500 - 3999 4000 - 7999 8000+ Price Check
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