PT Jaya buys 1000 boxes of type Y every 2 months. Ordering costs are $380 per order, holding costs are $1 per unit and vary directly with investment in inventory. The company is currently buying the item for $5 per unit.

Requested:

a. Determine the total cost of ordering and holding costs with the current policy.

b. Determine the EOQ and associated ordering and holding costs.

c. What is the optimal order size if the supplier offers a 5% discount on a purchase of 3000 units.