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C. The bookstore at State University purchases sweatshirts emblazoned

with the school name and logo form a vendor. The vendor sells the

sweatshirts to the store for $38.00 apiece. The cost to the bookstore

for placing an order is $120.00, and the carrying cost is 25% of the price paid per shirt

 

The bookstore manager estimates that 1,700 sweatshirts will be sold

during the year. The vendor has offered the bookstore the following volume

discount schedule.

 

 

 

 

Order Size                                              Discount %

 

1-299                                     0

 

300-499                                 3

 

500-799                                 5

 

800 +                                     6

 

 

 

 

 

The bookstore manager wants to determine the bookstores’ optimal order

quantity given the foregoing quantity discount information.