Version D Ltd Productions sells office decorations regionally. Demand for their acrylic paint sets is 7500 units annually. Their ordering costs are 22 dollars per order. Holding costs are 1.20 dollars per unit per year. They have been offered the following quantity discount schedule by their suppliers: Price Option Order Quantity (units) Unit Price ($)
Base price 1 to 299 5.00
Discount 1 300 to 699 4.85
Discount 2 700 and up 4.80
To minimize total costs, which Price Option should be chosen?
How many units should be ordered with each order? units.
To the nearest dollar, what is the minimum total annual inventory cost? dollars.