A local manufacturer uses 7,000 electronic switches boxes a year. Carrying costs are 15% of the cost of the switch per year, and ordering costs are $25 per order. The following price schedule applies. What is the optimal order quantity? Show all total costs calculations and explain your answer.

Number of Switches Price per Switch

0 - 299 $18.00

300 - 499 $17.00

500 or more $16.00