Use to minimize its total inventory-related costs

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Reference no: EM13957412

The following quantity discount is offered to a company that purchases 120,000 units of the product annually.

Order Quantity Price per Unit

0–1999 $50

2000–3999 $49

4000 or more $46

Each time an order is placed, the company incurs a cost of $75. If the company’s carrying charge is 25% of the price of the item, what order quantity should it use to minimize its total inventory-related costs?

Reference no: EM13957412

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