The quantity discount model in Example 12.2 uses one of two possible types of discount structures. It assumes that if the company orders 600 units, say, each unit costs $28. This provides a big incentive to jump up to a higher order quantity. For example, the total purchasing cost of 499 units is 499($30)  $14,970, whereas the total cost of 500 units is only 500($28)  $14,000.

Change the discount structure so that the first 499 units cost $30 apiece, the next 300 units cost $28 apiece, and any units from 800 on cost $26 apiece. Now the cost of 500 units is 499($30)  $28  $14,998. Modify the model to incorporate this structure, and find the optimal order quantity. (Hint: First, find the purchase cost per order with an IF formula. Then the annual holding cost is the annual interest rate times the purchase cost per order divided by 2.)