Question

Keith Shoe Stores carries a basic black dress shoe for men that sells at an annual demand of 2000 pairs. Keith’s current buying policy is to order 500 pairs each time an order is placed. An order costs Keith $30 to place. The annual carrying cost for each pair over a one year period is 20% of the price of a pair that Keith pays. At the order quantity of 500 pairs, Keith pays the lowest possible unit price of $28 per pair that the supplier could offer. Other quantity discounts offered by the supplier are given in the following table.

Order Quantity	Unit Price
Up to 199	$32
200 up to 299	$30
300 and more	$28

If Keith is willing to pay a unit price of $32.00, determine the actual order quantity if it takes the advantage of the quantity discounts.

Keith Shoe Stores carries a basic black dress shoe for men that sells at an annual demand of 2000 pairs. Keith’s current buying policy is to order 500 pairs each time an order is placed. An order costs Keith $30 to place. The annual carrying cost for each pair over a one year period is 20% of the price of a pair that Keith pays. At the order quantity of 500 pairs, Keith pays the lowest possible unit price of $28 per pair that the supplier could offer. Other quantity discounts offered by the supplier are given in the following table.

Order Quantity	Unit Price
Up to 199	$32
200 up to 299	$30
300 and more	$28

If Keith is willing to pay a unit price of $30.00, determine the total, including the purchase, carrying and ordering, cost.

Keith Shoe Stores carries a basic black dress shoe for men that sells at an annual demand of 2000 pairs. Keith’s current buying policy is to order 500 pairs each time an order is placed. An order costs Keith $30 to place. The annual carrying cost for each pair over a one year period is 20% of the price of a pair that Keith pays. At the order quantity of 500 pairs, Keith pays the lowest possible unit price of $28 per pair that the supplier could offer. Other quantity discounts offered by the supplier are given in the following table.

Order Quantity	Unit Price
Up to 199	$32
200 up to 299	$30
300 and more	$28

If Keith is willing to pay a unit price of $28.00, determine the total, including the purchase, carrying and ordering, cost.

Keith Shoe Stores carries a basic black dress shoe for men that sells at an annual demand of 2000 pairs. Keith’s current buying policy is to order 500 pairs each time an order is placed. An order costs Keith $30 to place. The annual carrying cost for each pair over a one year period is 20% of the price of a pair that Keith pays. At the order quantity of 500 pairs, Keith pays the lowest possible unit price of $28 per pair that the supplier could offer. Other quantity discounts offered by the supplier are given in the following table.

Order Quantity	Unit Price
Up to 199	$32
200 up to 299	$30
300 and more	$28

Which order quantity do you recommend to Keith?

Answer 1