Question (3) may need to apply the Quantity Discount Model.

A daycare center consumes 20 boxes of crackers each week, and incurs a unit holding cost of $2/box/year. Assume the daycare center operates 40 weeks per year. Consider the following questions independently. 1. [6 marks] The manager replenishes the inventory using an EOQ value. With the EOQ value, if the cycle time is 3 weeks, then what is the EOQ value used by the manager? 2. [6 marks] Suppose the EOQ value is 100 boxes, what is the ordering cost per order? 3. [11 marks] Now suppose the ordering cost is $32/order, the unit holding cost is still $2/box/year, and the original price charged by the supplier is $6/box. The supplier offers the manager a discount of 2% for purchasing at least 300 boxes at a time and a discount of x% for purchasing at least 500 boxes at a time. The manager chooses to take the discount of x% to minimize the total annual cost. What is the minimum value that x should be