Question

Firm B's demand for a product is 12 units per month. Its supplier charges an ordering cost of $5 per order and $10 per unit with a 10% discount for orders of 25 units or higher. Firm B incurs a 30% annual holding cost. What is the optimal order quantity for Firm B?

Answer 1

25

Step-by-step explanation:

Base on the scenario been described in the question, Firm B's demand for a product is 12 units per month, and the supplier charges an ordering cost of $5 per $10 per unit with a 10% discount for orders of 25 units or higher, the optimal quantity firm B can order is 25.