Quantity be in order to minimize the average annual cost

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The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are 600 units, $20/order and 30% of item price, respectively. Price is established by the following quantity discount schedule.

Quantity: (1 to 49 ) (50 to 249 ) ( 250 and up )

Price :( $5.00 per unit ) $4.50 per unit $4.10 per unit

What should the order quantity be in order to minimize the average annual cost? Also, show the minimal average annual cost.

Reference no: EM132076481

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