The Kuantan Corporation purchases a component from a supplier who offers quantity discounts to encourage larger order quantities. The supply chain manager of the company, Dr. Hadiyan Wijaya Ibrahim, wants to determine the optimal order quantity to ensure the total annual inventory cost is minimized. The companys annual demand forecast for the item is 5,400 units, the order cost is $25 per order, and the annual holding rate is 11 percent. The price schedule for the item is:

Order Quantity	Price per Unit ($)
1200	6.00
201600	5.00
601 and above	4.00