Problem 1 Keith Shoe Stores carries a basic black dress shoe for men that sells at an approximate constant rate of 500 pairs of shoes every 3 months. Keith's current buying policy is to order 500 pairs each time an order is placed. It costs Keith $30 to place an order. The annual holding cost rate is 20% of the cost of capital. With the order quantity of 500 Keith obtains the shoes at the lowest possible unit cost of $28/pair. Other quantity discounts offered by the manufacturer are as follows. What is the minimum cost order quantity of the shoes? What are the annual savings of your inventory policy over the policy currently being used by Keith? (10+2 = 12 marks) Order size 0-99 Price/pair $36 100 - 199 $32 200-299 $30 300+ $28