Question

A construction engineering company needs to purchase 1,000 sheets of steel. Which option is the most cost-effective way to purchase them?

100 sheets at a time for $500
200 sheets at a time for $1,000
500 sheets at a time for $1,500
1,000 sheets at a time for $3,500

Answer 1

Compare cost per sheet and total cost to reach 1,000 sheets:

- 100 sheets @ $500 → $5.00/sheet. Need 10 purchases → $500 × 10 = $5,000.
- 200 sheets @ $1,000 → $5.00/sheet. Need 5 purchases → $1,000 × 5 = $5,000.
- 500 sheets @ $1,500 → $3.00/sheet. Need 2 purchases → $1,500 × 2 = $3,000.
- 1,000 sheets @ $3,500 → $3.50/sheet. Need 1 purchase → $3,500.

Most cost-effective: buy two 500-sheet lots for a total of $3,000 ( $3.00 per sheet ).