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 item's 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 299

$550.00

300 to 1199

$535.00

1200 or more

$525.00

• 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?