The Bucks Grande major league baseball team breaks an average of four bats per week. The team orders baseball bats from Corky’s a bat manufacturer noted for its access to the finest hardwood. The order cost is $70, and the annual holding cost per bat per year is 38 percent of the purchase price. Corky’s price structure is

Order Quantity Price per Unit

0 to 11 .........$54.00

12 to 143 .......$51.00

144 or more ......$48.50

a. How many bats should the team buy per order?

b. What are the total annual costs associated with the best order quantity?

c. Corky discovers that, owing to special manufacturing processes required for the Bucks’s bats, it has tinder estimated setup costs. Bather than raise prices, Corky adds another category to the price Structure to provide an incentive for larger orders and reduce the number of setups required. If the Bucks buy 180 bats or more, the price will drop to $43.00 each. Should the Bucks revise the order quantity to 180 bats?