Question: Question 5: A warehouse stocks a certain Inventory item with a price of $400 per unit. The holding cost is $40 per unit per year,

Question 5: A warehouse stocks a certain Inventory item with a price of $400 per unit. The holding cost is $40 per unit per year, the ordering cost is $100 per order, and the monthly demand is 500 units. The warehouse's supplier decides to offer price discounts in order to attract larger orders. The price structure is shown below. Quantity purchased 1 - 149 units 150 - 199 units 200-249 units 250 or more units Price per unit $400 $375 $350 $330 (a) What is the optimal order quantity and the minimum annual cost for the warehouse to order, purchase and hold the inventory items? (b) How much would the warehouse lose if there were no discounts offered by the supplier? (3 marks for (a), and 2 marks for (b))

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Question 5: A warehouse stocks a certain inventory item with a price of $400 per unit. The holding cost is $40 per unit per year, the ordering cost is $100 per order, and the monthly demand is 500...

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