Question

The catering manager of LaVista​ Hotel, Lisa​ Ferguson, is disturbed by the amount of silverware she is losing every week. Last Friday​ night, when her crew tried to set up for a banquet for 500​ people, they did not have enough knives. She decides she needs to order some more​ silverware, but wants to take advantage of any quantity discounts her vendor will offer.

For a small order (2,000 pieces or​ less) her vendor quotes a price of $1.80​/piece.

If she orders 2,001 to 5,000 ​pieces, the price drops to $1.60​/piece.

5,001 to 10,000 pieces brings the price to $1.40​/piece, and

10,001 and above reduces the price to $1.25​/piece.

​Lisa's order costs are 195$ per​ order, her annual holding costs are 55​%, and the annual demand is 49,300 pieces. For the best option​ (the best option is the price level that results in an EOQ within the acceptable​ range):

​a) What is the optimum ordering​ quantity?___units ​(round your response to the nearest whole​ number).

​b) What is the annual holding​ cost?____(round your response to two decimal​ places).

​c) What is the annual ordering​ cost?_____(round your response to two decimal​ places).

​d) What are the annual costs of the silverware itself with an optimal order​ quantity?_____(round your response to the nearest whole​ number).

​e) What is the total annual​ cost, including​ ordering, holding, and purchasing the​ silverware?______​(round your response to two decimal​ places).