Kevin's Discount Store stocks toy race cars. Recently, the store has been given a quantity discount schedule for these cars:

(1). The normal cost for the toy race cars is $5.00.

(2). For orders between 1,000 and 1,999 units, the unit cost drops to $4.80;

Furthermore, ordering cost is $50.00 per order, annual demand is 5,000 race cars, and inventory carrying charge, as a percentage of cost, I, is 10%, or 0.1. What order quantity will minimize the total inventory cost? Apply four step process:

Write correct formula to be used for this question:

Q^*=

TC =

Step1 &2:Calculate Q* for every discount (adjust Q* if needed)

Q₁^* =

Q₂^* =

Step3:Calculate Total costs (show the calculation process)

TC₁ =

TC₂ =

Step4: Decision (best option: price and quantity)

Answer:________________________________________________