Question: Problem 13-13 A mail-order house uses 15,875 boxes a year. Carrying costs are 79 cents per box a year, and ordering costs are $97. The

Problem 13-13

A mail-order house uses 15,875 boxes a year. Carrying costs are 79 cents per box a year, and ordering costs are $97. The following price schedule applies.

Number of Boxes Price per Box
1,000 to 1,999 $1.45
2,000 to 4,999 1.35
5,000 to 9,999 1.25
10,000 or more 1.20

a. Determine the optimal order quantity.

b. Determine the number of orders per year.

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