As a purchasing manager, you have to decide how many units you will place an order. You have two order quantity options as an Economic Order Quantity (EOQ): 150 or 300. Your supplier offers you two quantity discount pricing schedules below. Remember, your goal is to minimize the cost of purchase.

Schedule 1: Incremental Unit Discount Schedule 2: All-Unit Discount

Quantity	unit	quantity	unit
1~50	$10	1~50	$10
51~100	$8	51~100	$9
101~150	$6	101~150	$8
151~200	$4	151~200	$7
More Than 200	$2	More Than 200	$6

1.The purchasing quantity (EOQ) is 150 units. Find the purchasing cost under each schedule. Which quantity discount schedule do you choose?

2.Now, the EOQ is 300 units. Find the purchasing cost under each schedule. Which quantity discount schedule do you choose?

3.Suppose the annual demand is 600 units. If you make a one-year contract with the supplier given the ordering quantities (EOQ) of either 150 or 300 above for the total annual demand of 600, which discount schedule is optimal? And what is the EOQ under your optimal schedule choice?