Consider four parts used in the assembly of a particular end-item. These four parts are purchased from the same supplier who offers a discount of 4% if the value of the total replenishment quantity is at least $200. Assume that $5 is the basic cost of placing an order with one item involved. The inclusion of each additional item costs $1. r = 0.24

$/$/year and the Di’s and v0i’s are shown below. Find the best order quantities.

Di v0i Item i (Units/Year) ($/Unit) P-96 1 5,000 1.20 2 10,000 2.25 3 2,500 6.25 4 500 0.85