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Suppose that you are a manager of a department, which uses 6000boxes of rivets per year. The supplier quotes you a price of $10per box for an order size of 199 boxes or less, a price of $8 perbox for orders of 200 to 999 boxes, and a price of $6 per box foran order of 1,000 or more boxes. You assign an annual holding costof $2.5 per unit of inventory. Assume that ordering cost is$50/order. If the optimal quantity for this model is 1000 units,what is approximately the minimal total annual cost of holding,ordering, and purchasing?$57,550.b. $49,200.c. $47,550.d. $41,550.e. $37,550.
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