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Problem 1: The annual demand, ordering cost, and the annual inventory carrying cost rate for a certain item are D = 600 units, S = $20/order and I = 30% of item price. Price is established by the following quantity discount schedule. What should the order quantity be in order to minimize the total annual cost?
Quantity Price
1 to 99 $8.00 per unit
100 to 199 $7.00 per unit
200 and up $6.00 per unit
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