13.26. County Hospital orders syringes from a hospital supply firm. The hospital expects to use 40,000 per year. The cost to order and have the syringes delivered is $800. The annual carrying cost is $1.90 per syringe because of security and theft. The hospital supply firm offers the following quantity discount pricing schedule. 0-9,999 $3.40 20,000-29,999 3.00 40,000-49,999 2.60 Determine the order size for the hospital

Question

Business

Amya Chaney

2 January, 17:12

13.26. County Hospital orders syringes from a hospital supply firm. The hospital expects to use 40,000 per year. The cost to order and have the syringes delivered is $800. The annual carrying cost is $1.90 per syringe because of security and theft. The hospital supply firm offers the following quantity discount pricing schedule. 0-9,999 $3.40 20,000-29,999 3.00 40,000-49,999 2.60 Determine the order size for the hospital

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Answers (1)

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Isiah Best · Answer 1

The order size=20,632 syringes

Explanation:

Step 1

Determine the expected total cost of the syringe;

Total cost=40,000

Step 2

Determine associated costs as follows;

Total associated costs=ordering cost + (carrying cost*number of syringes)

Total associated costs=800 + (1.9*n)

Total costs=1.9 n+800

Step 3

Equating;

1.9 n+800=40,000

1.9 n=40,000-800

1.9 n=39,200

n=39,200/1.9

n=20,631.579=20,632 syringes

The order size=20,632 syringes