Tes.Co is a wholesaler who buys and sells product EXE. The demand for product EXE is 24,000 units each year. Tes.CO sells product EXE at a unit price of RM20. The demand for the EXE normally follows an even pattern throughout the year. However, the company keeps a minimum stock of 1,000 units to protect itself against possible deviations. The company will place a new order whenever the stock falls to this minimum level and the time lag between ordering and delivery is small enough to be ignored. Currently, Tes.Co buys all EXE from Rainbow Company and usually purchases them in batches of 5,000 units. The company's most recent invoice from Rainbow Company was as follows: Item Invoice Basic price: 5000 EXE at RM15 per unit Delivery charge: Transport at RM0.50 per unit x 5000 units Fixed shipment charge per order (RM) RM75,000 RM2,500 RM1,000 RM78 500 The delivery charge is paid by Tes.CO as part of the purchase price. Tes.Co estimates that each order the company places costs them RM500, comprising administrative costs and the cost of sample checks. Tes.CO stores EXE in a warehouse on annual contracts at RM4 per square foot per annum. Each unit of EXE in stock requires two square feet of space. Tes.Co estimates that other holding costs amount to RM10 per EXE per annum Tes.Co has recently learnt that another supplier of EXE, Pink Company, is willing, unlike Rainbow Company, to offer discounts on large orders. Pink Company sells EXE at the following prices: Order size Price per unit (RM) 1-2999 3000-4999 RME 25 RM50