Please finish the calculation with constant and variable holding cost

under the quantity discount models.

a. A bike retailer purchases bikes from ABC factory to satisfy the annual of 5,000 sets. The

cost for each order placed is $100 and the carrying cost is $6/set for a year. The regular

wholesale price is $200. ABC factory offers the discount at 2% for ordering above 200 sets,

4% for ordering above 500 sets, and 6% for ordering above 600 set. Based on such

situation, please compute the optimal order quantity and the total annual cost.

b. A medical device agent has a predicted annual demand of 250. Supplier quotes the

prices as $21.6 for quantity of 1 to 49, $20.95 for the quantity of 50 to 99, and $20.90 for

the quantity of 100 and above. The ordering cost is fixed at $100 and the annual holding

cost is 30% of the purchasing value. Please compute the optimal order quantity and the

total annual cost.