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Determine the optimal order quantity

A mail-order house uses 16,820 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies.

 

Number of Boxes Price per Box
1,000 to 1,999 $1.25
2,000 to 4,999 1.20
5,000 to 9,999 1.15
10,000 or more 1.10

 

a.

Determine the optimal order quantity. (Round your answer to the nearest whole number.)

 

  Optimal order quantity  boxes

 

b.

Determine the number of orders per year. (Round your answer to 2 decimal places.)

 

  Number of order  per year
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