Hill Inc. produces GPS devices that use a printed circuit board (PCB) obtained from a preferred supplier. The annual demand for the PCB is 16,000 units per year. Demand is relatively constant through the year and the ordering cost is $25 per order. The annual holding cost is 20% of the price of each PCB. The supplier has offered two discounts in addition to its standard price based on the number of units ordered. Using an EOQ model with discounts, determine how much Mollenkopf Inc. should order and what the total annual inventory costs will be, given the discount information in the table below:
Quantity Price/unit
1-199 $38.40
200-499 $35.80
500 or more $34.70