A purchasing department is establishing an ordering policy that will minimize total costs while meeting the needs of the firm. Forecasts based on historical data indicate that the purchasing department will need to purchase 200,000 of this product on an annual basis. The producer has a minimum order quantity of 1,000 sheets, and offers a sliding price scale based on the quantity in each order, as follows. Ordering Cost is $1 per order. Holding cost is 10% of unit price.

Order Quantity Unit Price

1000-9999 $4.0

10000-24999 $3.2

25000 $2.8

Determine the optimal order quantity.