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 retailer estimates its annual holding costs to be 3.5%, what is the optimum order quantity of a continuous review policy?

(Note: Choose the closest answer.)

Multiple Choice

A) 519.62

B) 175

C) 525

D) 536.66