A University Orders All Office Supplies, Including Red Grading Pens

question 38

Multiple Choice

A university orders all office supplies, including red grading pens, out of a catalog from the same supplier. Conservative estimates of the demand for these red pens are 12,000 pens per year. There is a $25 charge for placing an order and the university has a $10 annual cost for holding these pens. Prices for the pens are based on the quantity purchased, so if less than 100 are ordered, the unit price is $2.50, if 100 to 299 are ordered, the unit price is $2.40, if 300 to 499 are ordered, the unit price is $2.30, and if 500 or more are ordered, the unit price is $2.20. What order quantity will result in the lowest total annual cost to the university?

• A)100
• B)245
• C)300
• D)500

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Definitions:

Biceps Femoris

A muscle of the posterior thigh that flexes the knee and extends the hip, part of the hamstring group.

Semimembranosus

A large muscle in the back of the thigh that is part of the hamstrings group and helps in thigh extension and knee flexion.

Extensor Digitorum Longus

A muscle in the lower leg that helps to extend the toes and dorsiflex the foot, aiding in walking and running.

Fibularis Tertius

A small muscle in the lower leg that helps with foot eversion and extension of the toes.