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As an inventory manager, you must decide on the order quantity for an item. Its annual demand is 3000 units. Ordering cost is $80 each time an order is placed, and the holding cost is 30 percent of the per-unit price. Your supplier provided the following price schedule.
Price per Unit
Order Quantity
$6.00
000-299
$5.00
300-699
$4.00
700 and more
What ordering-quantity policy do you recommend?
A) fewer than or equal to 200 units
B) greater than 200 units but fewer than or equal to 600
C) greater than 600 units but fewer than or equal to 700 units
D) more than 700 units
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