b) Job Limited purchases one of the parts needed in it production from a single supplier. The annual demand for the part is 80,000 parts. The normal price per part is sh 40. Orders are placed at a cost of Sh 10,000 per order. Inventory holding cost is estimated at 40% of actual purchase cost, per item, per year. At beginning of the current period, the supplier has offered following discount for bulky purchases.

Order size discount offered

1 - 11,999 units 0%

12,000 - 19,000 units 4%

20,000 - 59.999 units 6%

>60,000 units 10%

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Required. Advice the optimal size of order to place and compute total cost under this order. Show all workings (11 Marks