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Business, 29.07.2020 06:01 frankgore7598

A university bookstore buys mechanical pencils from a wholesaler. The wholesaler offers discount for large order quantity per shipment according to the following price schedule: Order Quantity Price Per Unit
1 to 200 $4.00
201 to 1,000 $3.60
1,001 to 2,000 $3.40
2,001 and greater $3.25
The bookstore expects an annual demand of 2,500 units. It costs $10 to place an order, and the annual cost of holding a unit in stock is 30% of the unit’s procurement price. Determine the best order quantity.

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