3The annual demand for Ergo-chairs sold in an office supply chain is 1,200 units. Ordering cost per order is $50, holding rate is 40%, and unit cost is $200. The company is offered the following quantity discount scheme: For an order of up to 119 units no discount. For an order up to 699 units- a discount of 25%, and for a larger order -a discount of 30%.

Use the discount template to answer.

4.1What is the order size that minimizes total inventory cost under the discount scheme? Enter the answer

4.2Show the calculation of the minimum total cost for the order size you selected as optimal in part 4.1. Show all the cost components in the answers sheet (annual ordering, etc.).

4.3Refer to 4.1. The lead time required by the supplier is 1.5 months. What is the inventory at hand when an order is placed? Use the optimal policy of part 4.1.

You must show your calculation if you select answer a, b, or c!!

a.37.8

b.44.72

c.30

d.None of the above

The seller is willing to change the third range border- line of 700 in order to convince the buyer to order more than the quantity found in part '4.1'. What is the largest border (instead of 700) that may convince the department store to increase its order size, above the order you found in part '4.1'? Use the discounts template, and search with only whole values (for example, 500, 501, etc.). You can use Goal Seek.

Enter your answer in the answers sheet.