Palmer executive uses 1,440,000 gallons of ink each year. Palmer can order the ink at a cost of $2 per gallon plus fixed ordering cost of $100 per order. The firms carrying cost is 20% of inventory value, at cost.

The firms EOQ is 26,832 units.

Its TIC original is 10,733.

If the firm is offered a discount of 5% for orders of 40,000 gallons should they take the discount?

(Show use of TIC formula)