Refer to the data in problem 31. If the annual holding cost is a constant $3.50 per shirt per year, compute the optimal order quantity and the total annual cost.

Data from problem 31

Emily Ford, the manager of a college bookstore, purchases polo shirts from a local vendor with the college name and logo printed on them. Emily purchases these t-shirts from the vendor at a cost of US$20 per shirt. The bookstore incurs an ordering cost of US$80 per order, and the annual holding cost is 20% of the purchase cost of a polo shirt. Emily estimates that the demand for the polo shirts for the upcoming year will be 2,000 shirts. The vendor is willing to offer quantity discounts to the bookstore according to the following schedule:

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Order Quantity Discount 0 to 499 0% 500 to 799 3% 700 to 999 4% 1,000+ 5%