Steelers Inc. uses 500 tons of steel per day. Suppose that the steel supplier offers Steelers Inc. a price of $1490 per ton of steel if Q 1200 tons; $1220 per ton of steel if 1200 2400. Each order incurs a fixed ordering cost of $2250. Holding costs are assessed at the annual interest rate of 25%.

a) Calculate the optimal order quantity

b) Total cost for the all-units discount structure and the incremental discount structure.