Q$1.$ Annual demand for a component is $2500$ boxes. The company procures the item from supplier at

a rate of Rs$.750$ per box. The company estimates the cost of carrying inventory to be $15\%$ per unit

per annum and the cost of ordering as Rs$.1020$ per order. Determine the EOQ.

The supplier is$,$ however, willing to offer a discount on the unit price as per the following structure:

Upto $399$ boxes $-2$ per cent discount

$400799$ boxes $-4$ per cent discount

$8001000$ boxes $-6$ per cent discount

What should the company decide in this case? Should they make use of the discount offered and

reset the EOQ.