### What order size should smith college acquire from vendor

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Evaluation of EOQ Decisions of college on vendor's order

The bookstore at Smith College purchases sport shirts with the college logo to sell from a local vendor. The vendor sells the sport shirts to the college for \$38 each. The cost to the bookstore for placing each order is \$120.  The carrying cost is \$5.20 per shirt per year. The bookstore estimates that 1700 sport shirts will be sold over the next year and does not want any shortages. The bookstore sells the shirt for \$50 each. There are 260 business days a year for the bookstore.   Lead time for filling an order once placed is 2 weeks. The vendor has offered the College Bookstore the following discounts:

 Order Size Discount % of Order Cost of Shirts from Vendor 1-299 0% discount \$38 300-499 2% discount \$37.24 500-799 4% discount \$36.48 800+ 6% discount \$35.72

What order size should Smith College acquire from the vendor?  Explain Why?

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