Problem 20-39 (Algo)
CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem:
Price of copper $0.82 per pound up to 2,999 pounds $0.81per pound for orders between 3,000 and 5,999 pounds $0.79per pound for orders 6,000 pounds or greaterAnnual demand 48,000pounds per yearHolding cost 30percent per unit per year of the price of the copperOrdering cost$30
Which quantity should be ordered?