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7) The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 600 units, S = $20/order

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7) The annual demand, ordering cost, and the inventory carrying cost rate for a certain item are D = 600 units, S = $20/order and I = 40% of item price. Price is established by the following quantity discount schedule. (Just state the answers to A and B. There is no need for supporting calculations to be shown here). Quantity: 1 to 149 150 to 249 250 and up Price: $5.00 per unit $4.50 per unit $4.10 per unit (A) What should the order quantity be to minimize the total annual cost? [10 Points] (B) What is minimum cost at that quantity? [10 Points]

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