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Community Hospital orders latex sanitary gloves from a hospital supply firm. The hospital ex- pects to use 40,000 pairs of gloves per year. The cost to order and to have the gloves delivered is
$180. The annual carrying cost is $0.18 per pair of gloves. The hospital supply firm offers the following quantity discount pricing schedule:
Quantity Price
|
0-9,999
|
$0.34
|
|
10,000-19,999
|
0.32
|
|
20,000-29,999
|
0.30
|
|
30,000-39,999
|
0.28
|
|
40,000-49,999
|
0.26
|
|
50,000+
|
0.24
|
Determine the optimal order size for the hospital.