RST Limited has received an offer of quantity discount on its order of materials as under:

The annual requirement for the material is 500 tonnes. The ordering cost per order is Rs. 12,500 and the stock holding cost is estimated at 25% of the material cost per annum.

Required:
(i) Compute the most economical purchase level.
(ii) Computer EOQ if there are no quantity discounts and the price per tonne is Rs. 10,500.

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Price per tonne Rs. 9,600 Rs. 9,360 Rs. 9,120 Rs. 8,880 Rs. 8,640 Tonnes number Less than 50 50 and less than 100 100 and less than 200 200 and less than 300 300 and above