Mac-in-the-Box sells computer equipment by mail and telephone order. Mac sells 2,400 flat-bed scanners per year. Ordering cost is $300 and the annual holding cost is 25 percent of the items price. There are 300 working days in the year and the lead time is 3 days. The scanner manufacturer offers the following price structure to Mac-in-the Box:

Order Quantity	Price per Unit
1 to 199	$520.00
200 to 499	$515.00
500 or more	$512.00

Given the above information and basing your decision on the economics, what order quantity do you recommend that Mac order from the scanner manufacturer? Why?

What is the low cost for each of the three Price per Unit options?

For the optimal order quantity, what is the inventory position immediately after an order is placed?