Question $4$

Demand for Bluetooth headphones at Gator Electronic $($GE$)$ is $5,000$ per month. Holding cost is

$25$ percent and the company incurs a fixed cost of $$500$ for each order placed.

a$.$ The supplier offers an all unit quantity discount with a price of $$200$ per headphone for all

orders under $1,000,$ a price of $$195$ for all orders of $1,000$ or more but under $2,000$ and a

price of $$190$ for all orders of $2,000$ or more. How many headphones should GE order per

replenishment? $(15$ pts$.)$

b$.$ The supplier offers a marginal unit quantity discount with a price of $$200$ per headphone

for all orders under $1,000,$ a price of $$195$ for all orders of $1,000$ or more but under $2,000$

and a price of $$190$ for all orders of $2,000$ or more. How many headphones should GE

order per replenishment? $(20$ pts$.)$