Question: A mail- order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and order-ing costs are $ 96. The

A mail- order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and order-ing costs are $ 96. The following price schedule applies. Determine

a. The optimal order quantity.

b. The number of orders per year.

Number of Boxes Price per Box

1,000 to 1,999 ..........$ 1.25

2,000 to 4,999 ..........1.20

5,000 to 9,999 ..........1.15

10,000 or more ..........1.10

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