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 5.0%, and the retailer implements periodic review to achieve 85% service level, how much should it order it it has 850 units in stock?

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 5.0%, and the retailer implements periodic review to achieve 85% service level, how much should it order it it has 850 units in stock?