Question

Order Size Discount 1-299 0% 300-499 2.0% 500-799 3.5% 800+ 6.0%

The bookstore at Tech purchases jackets emblazoned with the school name and logo from a vendor. The vendor sells the jackets to the store for $36 a piece. The cost to the bookstore for placing an order is $120 and the annual carrying cost is $10 per jacket. The bookstore manager estimates that 1,700 jackets will be sold during the year. The vendor has offered the bookstore the following volume discount schedule: Determine the optimal order quantity of jackets and total annual cost.

Answer 1