A manager of a production department uses about 1200 rivet boxes per year. In order not to keep too much inventory it has a policy of ordering 100 boxes at a time per month. However, a supplier offers you a discount for larger orders according to the following schedule, where the price is applied to all boxes purchased.

Discount Category	Quantity purchased	Price(per box)
1	1 to 199	85
2	200 to 399	80
3	400 or more	75

Consider an annual cost of holding 18% of the item's price (based on the purchase price). The total cost of placing an order is estimated at $150. Use the discounted EOQ model to assess this issue and that I would recommend, justify your response based on the savings that would be obtained with the change of the current policy.