A mining company routinely replaces a specific part on a certain type of equipment. The usage rate is 40 per week and there is no significant seasonality. The supplier of the part offers the following all-units discount structure: Range of Q Unit Cost 0 < Q < 300 $10.00 300 ≤ Q 9.70 The fixed cost of a replenishment is estimated to be $25 and a carrying charge of 0.26 $/$/year is used by the company.

a. What replenishment size should be used?

b. If the supplier was interested in having the mining company acquire at least 500 units at a time, what is the largest unit price they could charge for an order of 500 units?