Question

(Do not round intermediate calculations. Round your answer to the nearest whole number.)

What order quantity minimizes Millennium's annual ordering and holding
a. costs?
(Do not round intermediate calculations. Round your answer to 2 decimal places.)
If Millennium chooses to order 300 cases each time, what is the sum of its
b. annual ordering and holding costs?
(Do not round intermediate calculations. Round your answer to 2 decimal places.)
If Millennium chooses to order 100 cases each time, what is the sum of the ordering and holding costs incurred by each case sold?
(Do not round intermediate calculations. Round your answer to the nearest whole number.)
If Millennium is restricted to ordering in multiples of 50 cases (e.g., 50, 100,
d. 150, etc.), how many cases should it order to minimize its annual ordering an holding costs?
(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Millennium is offered a 5.00 percent discount if it purchases at least 1,000
e. cases. If it decides to take advantage of this discount, what is the sum of its annual ordering and holding costs?

Answer 1

Without the Economic Order Quantity (EOQ) formula and specific data, such as demand rate, ordering cost, and holding cost, it is not possible to provide the exact order quantities and costs for the scenarios presented in the student's question.

Step-by-step explanation:

The given question relates to finding the optimal order quantity that minimizes a firm's annual ordering and holding costs, which is a classic business and inventory management problem known as the Economic Order Quantity (EOQ). The EOQ formula that would typically be used to answer this question was not provided, and the necessary data to calculate the order quantities and subsequent costs were also not shared. Hence, without additional information such as demand rate, ordering cost per order, and holding cost per unit per year, the exact order quantity cannot be calculated.

Similarly, to determine the total ordering and holding costs for specific case order sizes like 300 and 100 cases, as well as the quantity to minimize costs when ordering in multiples of 50 cases, or deciding on taking advantage of a bulk discount for ordering at least 1,000 cases, we would need the aforementioned data to perform the calculations.