Management of Working Capital

A processing plant has a requirement of a particular chemical which is 40 kg per week. The cost of ordering is Rs. 150 per order, holding cost is Re. 100 per kg per week, and no shortages are permitted. Vendor A will supply the chemical at Rs. 1100 per kg. Vendor B quotes the following price schedule (where X is the order quantity):

kgs	Price per kg
0 X < 100	Rs. 11.50
100 X < 200	Rs. 11.20
200 X < 400	Rs. 10.80
400 X	Rs. 10.50

Which source would you prefer and what will be the minimum cost order size?