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.. 12.22 Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is

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.. 12.22 Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $120 per order, and sales are steady, at 400 per month. The com- pany's supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown in the table. Rich Blue Chip's Price Structure QUANTITY PURCHASED 1-99 units 100-199 units 200 or more units PRICE/UNIT $350 $325 $300 a) What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these in- tegrated chips? b) Bell Computers wishes to use a 10% holding cost rather than the fixed $35 holding cost in (a). What is the optimal order quantity, and what is the optimal annual cost? PX

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