A particular raw material is available to a company at three different prices, depending on the size

Question:

A particular raw material is available to a company at three different prices, depending on the size of the order:

Less than 100 pounds...............$ 20 per pound

100 pounds to 1,000 pounds............$ 19 per pound

More than 1,000 pounds.............$ 18 per pound

The cost to place an order is $ 40. Annual demand is 3,000 units. Holding (or carrying) cost is 25 percent of the material price.

What is the economic order quantity to buy each time?

Economic Order Quantity
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...