Answer to Question #56225 in Economics for Alexander

Question

Assume that the following quantity discount schedule is appropriate
Order size Discount (%) Unit cost (sh)
0 to 49 0 30
50 to 99 5 28.5
100 or more 10 27

If annual demand is 120 units, ordering costs are sh 20 per order and the annual holding cost rate is 25%, what order quantity would you recommend