A Manager Has Just Received a Revised Price Schedule from a Vendor

question 145

Essay

A manager has just received a revised price schedule from a vendor: $$\begin{array} { l l } \text { Quantity } & \text { Unit Price } \\\hline 1 \text { to } 39 \text { units } & \$ 14 \\40 \text { to } 59 \text { units } & \$ 13 \\60 \text { to } 89 \text { units } & \$ 12 \\90 \text { or more units } & \$ 11\end{array}$$ What order quantity should the manager use in order to minimize total costs?Annual demand is 120 units, ordering cost is $8, and annual carrying cost is $1 per unit.