Question

- Miguel has a product with an annual holding cost percentage of 20%, an ordering cost of $110 per order, and annual demand of 15,000 units. The following price schedule applies to the product from a supplier. What is the optimal order quantity? Show all work including a graph.

**Units **** Price **

**1-250 $30.00 **

**251-500 $28.00**

**501-750 $26.00 **

**≥ 751 $25.00**

Step 1

**The following table shows that calculation of optimal order quantity and total cost:**

Step 2

**The following table shows the formula to determine the total cost and optimal order quantity:**

Step 3

**The following figure shows the graphical representation of quanti...**

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