Uni Lever is in process to reduce its inventory costs. Annual demand for a raw material costing Rs. 12 per unit is 60,000 units per year. Inventory management costs for this raw material are ordering cost Rs. 6 per order and holding cost Rs. 05 per unit per year. The supplier of this raw material has offered a bulk purchase discount of 1% for orders of 10,000 units and 2% discount on order of 15000 unit or more. If bulk purchase orders are made regularly, it is expected that annual holding cost for this raw material will increase to Rs. 2 per unit per year. Required 1-Calculate the total cost of inventory for the raw material when using the economic order quantity. 2-Wether accepting the discount offered by the supplier will minimise the total cost of inventory for the raw material. Which quantity discount offer should be accepted?