Charlotte sells widgets which cost $50 each to purchase and prepare for sale. Annual sales are 10,000 widgets, carrying cost are 15% of inventory costs, and Charlotte incurs a cost of $25 each time an order is placed. Suppose her supplier decides to offer a 3% cash discount if products are ordered in increments of 1250. How many widgets should Charlotte order each time an order is placed to minimize costs?

EBK CFIN
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ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter15: Managing Short-term Assets
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Charlotte sells widgets which cost $50 each to purchase and prepare for sale. Annual sales are 10,000 widgets, carrying cost are 15% of inventory costs, and Charlotte incurs a cost of $25 each time an order is placed. Suppose her supplier decides to offer a 3% cash discount if products are ordered in increments of 1250. How many widgets should Charlotte order each time an order is placed to minimize costs? 

I have submitted this question twice and both times was answered with how many orders of 1250 will satisfy the demand of 10,000 widgets.

I need to know how to figure out HOW MANY WIDGETS PER ORDER to minimize costs.

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