Question: PLEASE, ANSWER IN COMPUTER TYPING, NO HAND WRITTING 12.7 The annual demand for an item is 40,000 units. The cost to process an order is

PLEASE, ANSWER IN COMPUTER TYPING, NO HAND

PLEASE, ANSWER IN COMPUTER TYPING, NO HAND WRITTING

12.7 The annual demand for an item is 40,000 units. The cost to process an order is $40 and the annual inventory holding cost is $3 per item per year. What is the optimal order quantity, given the following price breaks for purchasing the item? Quantity Price 1-1,499 $2.50 per unit 1,500 - 4,999 $2.30 per unit 5,000 or more $2.25 per unit a. What is the optimal behavior? b. Does the firm take advantage of the lowest price available? Explain

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