Input Data
Retailer
Annual Demand 240,000
Order cost per lot 200$
Unit cost 5$
Holding cost 20%
Crunchy
Order cost per lot 1,000$
Unit cost 3$
Holding cost 20%
Retailer Orders Independently Orders Optimize Joint Costs
Economic Quantity Ordered by Retailer 9798 Quantity that minimizes total cost 18974
Retailer ordering cost 4,899$ Retailer ordering cost 2,530$
Retailer holding cost 4,899$ Retailer holding cost 9,487$
Retailer total cost 9,798$ Retailer total cost 12,017$
Crunchy delivery cost 24,495$ Crunchy delivery cost 12,649$
Crunchy holding cost 2,939$ Crunchy holding cost 5,692$
Crunchy total cost 27,434$ Crunchy total cost 18,341$
Total cost across both parties 37,232$ Total cost across both parties 30,358$
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Lot size breakpoint 18974
Unit cost below breakpoint 5
Discount per unit at breakpoint 0.00917$
Discounted price at breakpoint 4.99083$
Retailer Orders EOQ
EOQ for retailer 9798
Order cost at EOQ 4,899$
Holding cost at EOQ 4,899$
Material cost at EOQ 1,200,000$
Total cost at EOQ 1,209,798$
Retailer Orders Breakpoint
Order quantity 18974
Order cost for retailer 2,530$
Holding cost for retailer 9,469$
Material cost for retailer 1,197,799$
Total cost for retailer 1,209,798$
Input Data
Retailer
Annual Demand 240,000
Order cost per lot 750$
Unit cost 5$
Holding cost 20%
Crunchy
Order cost per lot 450$
Unit cost 3$
Holding cost 20%
Retailer Orders Independently but Crunchy Passes Along Part of the Delivery Cost
Economic Quantity Ordered by Retailer 18974
Retailer ordering cost 9,487$
Retailer holding cost 9,487$
Retailer total cost 18,974$
Crunchy delivery cost 5,692$
Crunchy holding cost 5,692$
Crunchy total cost 11,384$
Total cost across both parties 30,358$
Delivery Cost Passed by Crunchy to Retailer 550