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The manager at Robert s Cigars wants to determine the lowest cost order policy given the following purchase discounts offered: cigar costs are $ 4

The manager at Roberts Cigars wants to determine the lowest cost order policy given the following purchase discounts offered: cigar costs are $4 each for orders less than 500; $3.50 each for orders of 5001000; and $3.25 each for orders greater than 1000. The order cost = $75, annual demand forecast =5500 cigars, inventory carrying cost =30% per year. (Hint: Determine the 3 EOQs then calculate the total annual inventory costs).

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