Reference no: EM132060772

As a manager of an operation's unit, your department uses 2,000 boxes of 2" screws each year. The supplier quotes you a price of $20 per box for an order size of 499 boxes or less, a price of $19 per box for orders of 500 to 999 boxes, and a price of $18 per box for an order of 1,000 or more boxes. You assign a holding cost of 20 percent of the price of the unit to this inventory. Assume ordering cost is $50/order. What order quantity would you use if the objective is to minimize total annual costs of holding, purchasing, and ordering?