Question: Question: As inventory manager, you must decide on the order quantity for an item that has an annual demand of 2,000 units. Placing an order

Question: As inventory manager, you must decide on the order quantity for an item that has an annual demand of 2,000 units. Placing an order costs you $20 each time. Your annual holding cost, expressed as a percentage of average inventory value, is 20 percent. Your supplier has provided the following price schedule.

Minimum Order Quantity Price per Unit
1 $2.50
300 $2.40
450 $2.25
650 $2.00

Use Excel to sketch the cost curves of the four prices and show the best quantity. To make your sketch look clear, for the x-axis, use the range 200-800, while for the y-axis; use the range from 170 to 230.

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