A supplier for an electronics store has introduced quantity discounts to encourage larger order quantities of cameras. The price schedule is:

Quantity purchased	Price per unit
fewer than 525	$80
at least 525	$75

Suppose the monthly demand at a retail store that buys from this retailer and resells is 175 units. The supplier charges a fixed cost of $180 per shipment. The cameras are expected to sell well for multiple seasons, so multiple replenishment opportunities are possible.

If the holding cost is 4.0%, and the retailer implements periodic review to achieve 95% service level, how much should the retailer order if it has 500 units in stock?

Multiple Choice

200

266

500

766