Aretailer sellsluxuryshirts whicharesupplied byamanufacturer.Theannualdemandfortheseshirts is 1,000 units. The manufacturer sells the shirts to the retailer at the unit price of $1000. For the retailer,theholdingcostofeachshirtperyearisestimatedtobe1%oftheunitprice,andtheordering cost is $50 per order. Facing strong price competition, the retailer has asked the manufacturer for discounts. After negotiation, the manufacturer offers the following discount schedule for theretailer:

Quantity ordered per order	Discount on unit price
Less than 200 shirts	0%
200-399 shirts	5%
400 shirts or above	10%

Theretailer hastodeterminethebestorderquantity afterconsideringthisquantitydiscount schedule. The retailer will include the annual product cost in the calculation of the total annual cost. Consistently, it takes 20 working days for the supplier to fulfill an order, and there are 250 working days a year for both manufacturer and retailer. All assumptions of the Economic Order Quantity (EOQ) model are satisfied. Show the units and steps of your calculation when you answer the following questions. Round your answers to one decimalplace.

1. Compute the EOQ without discount and total annual cost. (20marks)
2. Compute the EOQ with 5% discount and totalannual cost. (25marks)
3. Compute the EOQ with 10% discount and totalannual cost. (25marks)
4. Determine the best order quantity and the number of orders placed per year

for the retailerif that order quantity isused. (20 marks)

1. Determine the reorder point (ROP). (10marks)