1. A testing lab is trying to determine how many test kits it should order from its supplier. They use 780 kits per year. The annual holding cost is $3 per kit per year. The ordering cost is $15 per order. The supplier offers a quantity discount.

1. Draw the Order quantity (Q) verses Total Annual Cost graph with 3 item prices (as shown in Figure 12.7 of the textbook).
2. What is the optimum buying condition (Price and Quantity)?
3. What is the total cost (holding cost + ordering cost + material cost) at optimum condition?

Quantity	$Price
1-72	60
73-144	56
145 and more	53