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20 January, 21:48

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?

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  1. 20 January, 21:57
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    25

    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.
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