Southeast Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The daily demand for these connectors is 50 units. Southeastern estimates its annual holding cost for this item to be 25% per unit. The cost of each unit is $120 while the cost to place and process an order from the supplier is $75.

1. What is the optimal order quantity?

   		270
   		274
   		470
   		472

2. Compute for the annual holding and ordering cost.

   		$ 4,110.90
   		$ 5,105.75
   		$ 7,384.25
   		$ 8,215.84

3. The supplier decided to run a trade promotion, lowering the price of switch connector by $10 for a month. How much is the lot size increase (forward buy) because of the discount?

   		5,480
   		5,754
   		5,842
   		5,900