EXERCISE Inventory Management Avtek, a distributor of audio and video equipment, wants to reduce a large stock of televisions. It has offered a local chain of stores a quantity discount pricing...

need help figuring out EOQ Model & Production Quantity Model


EXERCISE Inventory Management Avtek, a distributor of audio and video equipment, wants to reduce a large stock of televisions. It has offered a local chain of stores a quantity discount pricing schedule as follows: Quantity Price 1-49 $1,400 50-89 $1,100 90+ $ 900 The annual carrying cost for the stores for a TV is $190, the ordering cost is $2,500, and annual demand for this particular model TV is estimated to be 200 units. The chain wants to determine if it should take advantage of this discount or order the basic EOQ order size.