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Quarks sells three types of muesli, the Shoko, the Fruit & Nut, and the Berries Mix. Annual demands for the three products are DS =

Quarks sells three types of muesli, the Shoko, the Fruit & Nut, and the Berries Mix. Annual demands for the three products are DS =50,000 for the Shoko, DF =40,000 units for the Fruit & Nut, and DB =30,000 units for the Berries Mix. Each type costs Quarks $2 per package. A fixed transportation cost of $1,000 is incurred each time an order is delivered. For each type ordered and delivered on the same truck, an additional fixed cost of $100 per type is incurred for receiving and storage. Quarks incurs an annual unit holding cost of 20 percent. Suppose Quarkss Shoko supplier now offers quantity discount. If Quarks orders more than 20,000(including 20,000) packages in a single order, it will be charged a discounted price for all units ordered.
a. If the discount rate is 1%, find the optimal order quantity and total annual cost including fixed ordering cost, variable ordering cost, and inventory holding cost. (3pt)
b. If the discount rate is 0.1%, find the optimal order quantity and total annual cost including fixed ordering cost, variable ordering cost, and inventory holding cost. (3pt)

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