Problem 20-39 (Algo)

CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break and other data for the problem:

Price of copper	$	0.80	per pound up to 2,499 pounds
	$	0.79	per pound for orders between 2,500 and 4,999 pounds
	$	0.77	per pound for orders 5,000 pounds or greater
Annual demand		51,000	pounds per year
Holding cost		30	percent per unit per year of the price of the copper
Ordering cost	$	30

Which quantity should be ordered?