The distributor has been offered an all-units quantity discount as follows. If he purchases less than 2000 units, he still pays $10 per unit. However, if he purchases at least 2000 units, then he would pay $9 per unit. Assume that the rest of the parameters remain the same. What would be the new optimal ordering quantity? (Hint: The total cost in the economic order quantity model can be calculated as ).

Multiple Choice

• 400

• 1600

• 1687

• 2000