Question: Samsung's mobile communications division uses 2 0 , 0 0 0 memory chips per month. Their trucking company charges Samsung $ 3 0 0 per

Samsung's mobile communications division uses
20
,
000
memory chips per month. Their trucking company charges Samsung $
300
per shipment, independent of the quantity purchased. The manufacturer of the memory chips offers an all unit quantity discount with a price of $
1
per memory chip for orders under
18
,
000
units, $
0.96
per chip for orders between
18
,
000
and
36
,
000
units
(
including
18
,
000
and excluding
36
,
000)
,
and $
0.92
per chip for orders
36
,
000
units and larger. Samsung incurs a holding cost rate of
15
%
per year. What is the optimal lot size and optimal total cost
(
TC
*)
for Samsung?

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