Ex. 11.13 check
All Unit Discount (Exercise 11-13)
Fixed cost per order = 400.00$ per order
Monthly demand = 20,000 sq. feet
Holding cost = 20%
Pricing:
Min Qty Max Qty Price per sq. ft.
0 29,999 5.00$
30,000 40,000 4.90$
Range
i QAdjust to q Total Cost
0 13,856 13,856 1,213,856$
1 13,997 30,000 1,193,900$
Without Quantity Discount
Price per sq ft Q Total Cost
5.00$ 13,856 1,213,856$
Exercise 11-13 (All Unit Quantity Discount)
Fixed cost per order = 400.00$ per order
Monthly demand = 20,000 sq. feet
Holding percentage = 20%
Pricing: Min Quantity Price per sq. ft.
0 5.00$
30,000 4.90$
Quantity Unit Cost Holding Cost Order Cost Material Cost Annual Cost
1,000 5.00$ 500$ 96,000$ 1,200,000$ 1,296,500$
2,000 5.00$ 1,000$ 48,000$ 1,200,000$ 1,249,000$
3,000 5.00$ 1,500$ 32,000$ 1,200,000$ 1,233,500$
4,000 5.00$ 2,000$ 24,000$ 1,200,000$ 1,226,000$
5,000 5.00$ 2,500$ 19,200$ 1,200,000$ 1,221,700$
6,000 5.00$ 3,000$ 16,000$ 1,200,000$ 1,219,000$
7,000 5.00$ 3,500$ 13,714$ 1,200,000$ 1,217,214$
8,000 5.00$ 4,000$ 12,000$ 1,200,000$ 1,216,000$
9,000 5.00$ 4,500$ 10,667$ 1,200,000$ 1,215,167$
10,000 5.00$ 5,000$ 9,600$ 1,200,000$ 1,214,600$
11,000 5.00$ 5,500$ 8,727$ 1,200,000$ 1,214,227$
12,000 5.00$ 6,000$ 8,000$ 1,200,000$ 1,214,000$
13,000 5.00$ 6,500$ 7,385$ 1,200,000$ 1,213,885$
14,000 5.00$ 7,000$ 6,857$ 1,200,000$ 1,213,857$
15,000 5.00$ 7,500$ 6,400$ 1,200,000$ 1,213,900$
16,000 5.00$ 8,000$ 6,000$ 1,200,000$ 1,214,000$
17,000 5.00$ 8,500$ 5,647$ 1,200,000$ 1,214,147$
18,000 5.00$ 9,000$ 5,333$ 1,200,000$ 1,214,333$
19,000 5.00$ 9,500$ 5,053$ 1,200,000$ 1,214,553$
20,000 5.00$ 10,000$ 4,800$ 1,200,000$ 1,214,800$
Ex. 11.13
31,000 4.90$ 15,190$ 3,097$ 1,176,000$ 1,194,287$
32,000 4.90$ 15,680$ 3,000$ 1,176,000$ 1,194,680$
33,000 4.90$ 16,170$ 2,909$ 1,176,000$ 1,195,079$
34,000 4.90$ 16,660$ 2,824$ 1,176,000$ 1,195,484$
35,000 4.90$ 17,150$ 2,743$ 1,176,000$ 1,195,893$
36,000 4.90$ 17,640$ 2,667$ 1,176,000$ 1,196,307$
37,000 4.90$ 18,130$ 2,595$ 1,176,000$ 1,196,725$
38,000 4.90$ 18,620$ 2,526$ 1,176,000$ 1,197,146$
39,000 4.90$ 19,110$ 2,462$ 1,176,000$ 1,197,572$
40,000 4.90$ 19,600$ 2,400$ 1,176,000$ 1,198,000$
41,000 4.90$ 20,090$ 2,341$ 1,176,000$ 1,198,431$
42,000 4.90$ 20,580$ 2,286$ 1,176,000$ 1,198,866$
43,000 4.90$ 21,070$ 2,233$ 1,176,000$ 1,199,303$
44,000 4.90$ 21,560$ 2,182$ 1,176,000$ 1,199,742$
ex. 11.13 chart
$1,180,000
$1,200,000
$1,220,000
$1,240,000
$1,260,000
$1,280,000
$1,300,000
$1,320,000
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000
Annual Cost
Order Size
Total Annual Cost versus Order Size