XY Company imports second-hand bags from South Korea to re-sell them in the U.S. The annual demand of the product is 2500 units. The cost related to placing an order, including the customs procedures, is $250. The cost of keeping the inventory has been estimated as of 20% of the price payed per unit.
The manufacturer offers the following data:
|
Quantity
|
Price per Unit
|
|
1-199
|
$10.00
|
|
200-499
|
9.80
|
|
500-999
|
9.65
|
|
1,000-4,999
|
9.60
|
|
5,000 or more
|
9.55
|
Make an analysis to the owner of XY Company about the amount of hand-bags he will need in order to minimize the total annual cost of acquiring them.