Question: Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $120 per order,

Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $120 per order, and sales are steady, at 4800 units per year. The companys supplier, Rich Blue-Chip Manufacturing, Inc., decides to offer price concessions in order to attract larger orders. The price structure is shown below.

Quantity	Price ($)
0-99 units	350
100-199 units	325
200+ units	300

What is the optimal order quantity and the minimum annual cost for Bell Computers to order, purchase, and hold these integrated chips?

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