Determine the optimal order quantity

Reference no: EM13819380

A mail-order house uses 16,820 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies.

Number of Boxes	Price per Box
1,000 to 1,999	$1.25
2,000 to 4,999	1.20
5,000 to 9,999	1.15
10,000 or more	1.10

a. Determine the optimal order quantity.

b. Determine the number of orders per year.

Reference no: EM13819380

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