What is the total annual cost at the optimal order quantity

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Sparky Lighting has an annual requirement of 53,000 units for a product, the supplier of which offers quantity discounts to promote larger order quantities. The cost to place an order is $950 and the inventory holding rate is 29 percent of the purchase cost. The purchase cost per unit is based on the price schedule given by the supplier below. ORDER QUANTITY PRICE PER UNIT 0 –1,399 $213.00 1,400 –1,499 $208.00 1,500 or More $203.00 What is the total annual cost at the optimal order quantity? (Hint-need to determine the optimal order quantity.)

Reference no: EM131648327

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