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Determine the optimal order quantity

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A small mail-order company uses 21,500 boxes a year. Holding cost rate is 21 percent of unit cost per year, and ordering cost is $29 per order. The following quantity discounts are available.

Number of Boxes Price per Box

1,000 to 1,999 $1.50
2,000 to 4,999 $1.45
5,000 to 9,999 $1.42
10,000 or more $1.39

a. Determine the optimal order quantity.

Optimal order quantity = ? boxes

b. Determine the number of orders per year. (Round the final answer to 1 decimal place.)

No. of orders per year = ?

Reference no: EM132708196

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