A manufacturer requires 9,600 units of a certain component annually. This is currently purchased from a regular supplier at Rs. 50 per unit. The cost of placing an order is Rs. 60 per order and the annual carrying cost is Rs. 5 per piece. What is the economic order quantity (EOQ) for placing order?

Recently the supplier has expressed his willingness to reduce the price to Rs. 48, if the total requirements are obtained from him in two equal orders and to Rs. 47, if the entire quantity required is purchased in one lot. Analyse the cost of the three options and recommend the best course.
What other factors should also be considered before the decision is taken?