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.
b. Determine the number of orders per year.