Question: Wivelsfield currently uses the economic order quantity ( EOQ ) to establish the optimal order quantities for their main raw material. The company has been

Wivelsfield currently uses the economic order quantity (EOQ) to establish the optimal order quantities for their main raw material. The company has been approached by an alternative supplier who would be willing to offer the following discounts:
Order quantity Discount/
0-199 units 1\%
\(200-499\) units 3\%
\(500-699\) units 5\%
700 units or more 7\%
Information regarding current inventory costs is as follows:
Holding cost per unit per annum \(=10\%\) of purchase price
Order costs =\$2 per order
Annual demand \(=15,000\) units
Purchase price \(=\$ 15\)
Current EOQ =200 units
 Wivelsfield currently uses the economic order quantity (EOQ) to establish the

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