Operations Management: Inventory Managment – EOQ – #287


Question: Georgia Products offers the following discount sched­ule for its 4-foot by 8-foot sheets of good-quality ply­wood:

9 sheets or less 18.00

10 to 50 sheets 17.50

More than 50 sheets 17.25

Home Sweet Home Company orders plywood from Georgia Products. Home Sweet Home has an ordering cost of $45. The carrying cost is 20%, and the annual demand is 100 sheets. What do you recommend?

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