1.

ABC Home Improvement Supplies, Inc. sells Ironton 72 inch digging bars. The annual demand for the digging bars is estimated to be 5000 bars. The ordering cost is $60 per order and the carrying cost is 20% of the unit price paid. Its supplier offers quantity discounts as shown in the following table

Order Quantity	Unit Price
Up to 499	$25
500 up to 999	$24
1000 and more	$23

If ABC is willing to pay a unit price of $25.00, determine the actual order quantity to take advantage of the quantity discounts

2.

ABC Home Improvement Supplies, Inc. sells Ironton 72 inch digging bars. The annual demand for the digging bars is estimated to be 5000 bars. The ordering cost is $60 per order and the carrying cost is 20% of the unit price paid. Its supplier offers quantity discounts as shown in the following table

Order Quantity	Unit Price
Up to 499	$25
500 up to 999	$24
1000 and more	$23

If ABC is willing to pay a unit price of $23.00, determine the total, including the purchase, carrying and ordering, cost

3.

ABC Home Improvement Supplies, Inc. sells Ironton 72 inch digging bars. The annual demand for the digging bars is estimated to be 5000 bars. The ordering cost is $60 per order and the carrying cost is 20% of the unit price paid. Its supplier offers quantity discounts as shown in the following table

Order Quantity	Unit Price
Up to 499	$25
500 up to 999	$24
1000 and more	$23

Which order quantity do you recommend to ABC so as to minimize total inventory cost?