You need to determine the inventory policy for product FB7056. The FB7056 is an industrial product that has very stable, uniform demand. The annual demand for the FB7056 is 3260 units and they come in cartons of 100 units each. The cost from the vendor is $45 per unit at their dock door. To have it delivered to your DC, you have to pay $15 per unit (not carton) with a minimum order of 200. Any order below 200 units costs $17 per unit to transport. The selling price for the FB7056 is $175 per unit. You have estimated that the cost to place an order is about $500 and your firm's holding cost is 18% per year.

What optimal inventory policy do you recommend?

Order quantity (Q)