Question

IM.82 A distributor of industrial equipment purchases specialized compressors for use in air conditioners. The regular price is $55, however, the manufacturer of this compressor offers quantity discounts per the following discount schedule: Option Plan Quantity Discount A 1 - 499 0% B 500 - 1,199 0.75% C 1,200+ 1.50% The distributor pays $68 each time it places an order with the manufacturer. Holding costs are negligible (none) but they do earn 7% annual interest on all cash balances (meaning there will be a financial opportunity cost when they put cash into inventory). Annual demand is expected to be 7,000 units. When there is no quantity discount (Option Plan A, the first row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) Number Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) Number When there is a 0.75% discount (Option Plan B, the second row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) Number Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) Number When there is a 1.50% discount (Option Plan C, the third row of the schedule listed above), what is the adjusted order quantity? (Display your answer to the nearest whole number.) Number Based on your answer to the previous question, and based on the annual demand as stated above, what will be the annual ordering costs? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (two questions back), what will be the average number of units held in inventory? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (three questions back), and assuming a materials cost for the given discount, what will be the annual holding cost? (Display your answer to the nearest whole number.) Number Using the adjusted order quantity as determined above (four questions back), and assuming a materials cost for the given discount, what will be the total annual inventory cost? (Display your answer to the nearest whole number.) Number Sort each option plan from left to right by dragging the MOST preferred option plan to the left, and the LEAST preferred option plan to the right:

Answer 1