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Suppose MedSupplies implements the EOQ model. An inventory of a specialised product 'Scalpel A' has to be maintained at MedSupplies using the EOQ model, based upon the following information:
Inventory Information for product 'Scalpel A'
Annual Demand: 390 units
Ordering Cost: $24
Our Selling Price per Unit: $54
Holding Cost Percentage: 30%
Stockout Cost per Unit: $60
Lead Time from Supplier: 1 month
The supplier has offered quantity discounts for bulk orders of the 'Scalpel A' product. The price brackets are as follows:
Bulk Discounts from Supplier for product 'Scalpel A'
Quantity
Cost per Unit
1 - 30 Units: $22
31 - 80 Units: $12
81 plus Units: $6
Under this pricing offer, what is the optimal order quantity for product 'Scalpel A' that minimises annual total inventory costs for MedSupplies? Present your workings in a table format and also explain to management how you reached your solution.
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