Binary Choice sells laptops. Their supplier charges $50 per order and holding the cost of 200 per unit. They sell 50 computers a month. The manufacturer offered the following:
Order / Price per unit
< 11 $520
12-64 $500
65-128 $495
>128 $485
1. What order quantity minimizes total annual inventory cost?
2. The supplier made new offering they increase the shipping cost to $515 per computer but not charge for inventory or ordering cost, should they take the offer?