Question: 7. (12 Marks) The total demand for all an item is 10,000 units per year, with the ordering cost is $50 per order. The holding

7. (12 Marks) The total demand for all an item is 10,000 units per year, with the ordering cost is $50 per order. The holding cost rate is 20 percent of the unit price. The unit price list is shown below. What order quantity is optimal? What ROP is appropriate if the acceptable risk of a stock-out is 1.5 percent? Order Quantity Range Unit Price 1-500 units $29.50 501-750 26.87 751-1500 24.77 1,501-2,000 23.93

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