CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine

Question:

CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to "determine the order quantity, Q , to meet the annual demand at the lowest cost. The price of copper "depends on the quantity ordered. Here are price-break and other data for the problem:

Price of copper

$.82 per pound up to 3.499 lbs

$.81 per pound for orders between 2,500 and 5,000 lbs

$.81 per pound for orders greater than 5,000 lbs

Annual demand

Holding costs

Ordering costs

Which quantity should be ordered?