an automobile insurance company uses a lot of expensive multipart paper to process its claims. the printer from whom they receive the paper has informed them of discounts available for quantity orders, but the company doesn't have space to store the entire amount ordered at one time. the company uses the paper at the rate of 50 boxes per week. the company operated 50 weeks per year. it costs $100 to place an order and it costs 15% of the acquisition cost to store it. the printer is offering the following discounts: range of order acquisition cost(price) quantities per box 0 999 $15 1000 1999 $14.90 2000 $14.85

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09-12-2022
Business

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an automobile insurance company uses a lot of expensive multipart paper to process its claims. the printer from whom they receive the paper has informed them of discounts available for quantity orders, but the company doesn't have space to store the entire amount ordered at one time. the company uses the paper at the rate of 50 boxes per week. the company operated 50 weeks per year. it costs $100 to place an order and it costs 15% of the acquisition cost to store it. the printer is offering the following discounts: range of order acquisition cost(price) quantities per box 0 999 $15 1000 1999 $14.90 2000 $14.85

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smecloudbird18 smecloudbird18 · Answer 1 · 2022-12-17T22:47:17-05:00

The automobile insurance company can benefit from the quantity discounts offered by the printer by making sure they order the right amount of multipart paper to meet their needs.

It's important to note that it costs $100 to place an order and 15% of the acquisition cost to store it, so the insurance company needs to find a way to balance the acquisition cost with the cost of storage.

To do this, the company should consider the range of order acquisition costs and the quantity per box offered. For orders under 999 boxes, the cost per box is $15. For orders between 1000 and 1999 boxes, the cost per box is $14.90. For orders over 2000 boxes, the cost per box is $14.85.

Given that the insurance company uses 50 boxes per week, they should order 1000 boxes at a time to get the best price per box. This would cost them $14,900 plus the $100 order fee and the 15% storage fee, which would bring the total cost to $17,285. This is a savings of $335 compared to ordering 999 boxes.

By ordering the right amount of multipart paper at a time, the insurance company can save money and ensure they have enough paper to meet

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