Book: Operations And Supply Chain Management Jacobs & Chase 14e Chapter 20 Inventory Management The I-75…

Book: Operations And Supply Chain Management Jacobs
& Chase 14e
Chapter 20 Inventory Management
The I-75 Carpet Discount Store has an annual demand of 10,000
yards of super shag carpet. The annual carrying cost for a yard of
carpet is $0.75 and the ordering cost is $150. The carpet
manufacturer normally charges the store $8 per yard for the
carpet.; however, the manufacturer has offered a discount price of
$6.50 per yard if the store will order 5,000 yards. How much should
the store order, and what will be the total inventory cost for that
order quantity?

Order Size

P

0–4,999

$8.00

5,000 +

$6.50