Consider a university that purchases replacement chairs for its classrooms. The purchasing manager knows that the annual demand for replacement chairs is 500. The pricing schedule is as follows: Use the following Excel solution to this quantity discount problem with constant carrying cost. Carrying cost = $ 15 Ordering cost = $ 200 Annual Demand = 500

Quantity Price Q Discount Q Total Cost

100 $130 115.47 115.47 $ 66,732.05

200 $122 115.47 200.00 $ 63,000.00

500 $120 115.47 500.00 $ 63,950.00

Ref 13-1 What is the inventory ordering cost using the economic order quantity?

A. $1,000

B. $866

C. $500

D. $200