The Meeruam Manufacturing Company has always used the economic order quantity formula when determining the best quantity to order. Recently, they were given the opportunity to receive quantity discounts for various materials. The managers assembled the schedule of discounts as follows: mk741

This company normally uses 3,000 units each year and pays $10.50 for each purchase order. The carrying cost is 10% of average inventory value and each unit costs $15.
Required:
a_ Using the formula method and ignoring the discounts, calculate the EOQ.
b Management has decided to determine the economic order quantity for order sizes of 50, 150, 300, 450, 600, 900, 1,500, and 2,500. Show tabulations which include the expense of foregoing quantity discounts.

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Units purchased 1-98 99-449 Discount None $.10 per unit 450-999 .30 per unit 1,000 up .40 per unit