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Optimal order quantity and the total cost

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Problem: A humanitarian lab maintains an inventory of test kits for a variety of procedures. It uses 780 kits each year. Ordering costs are $15 and holding cost are $3 per kit per year. The new price list indicates that orders of fewer than 73 kits will cost $60 per kit and 73 through 144 kits will cost $56 per kit and orders of more than 144 kits will cost $53. Determine the optimal order quantity and the total cost. Please provide the step by step solution of this problem.

Reference no: EM132417239

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