Question: Note- When evaluating the discounted quantity, make sure to add 1 to the minimum quantity. Include purchasing price when you calculate the annual cost. A

Note- When evaluating the discounted quantity, make sure to add 1 to the minimum quantity. Include purchasing price when you calculate the annual cost.

A car manufacturer has holding costs of 34%. One of the items needed in the factory is door handles. For every order, the facotry incurs a fixed cost of $62.00 . The manufacturer needs annually 1,975 of the door handles. The door handles supplier offers a price of $14.00 each for quantities of 375 or fewer and a price of $13.16 for quantities over 375 units.

How many units should be the manufacturer order at one time?

What is the total annual cost at this order point?

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