If the hospital orders correctly what is its annual minimum


A supplier for St. John Hospital has introduced quantity discounts to encourage larger order quantities of a special catheter. The regular price is $29 per unit; and if the hospital orders 200 units or more, the unit price is $25. The hospital estimates that its annual demand for this item is 936 units, its ordering cost is $45 per order, and its annual holding cost is 10 percent of the catheter’s unit price. If the hospital orders correctly, what is its annual minimum total cost for this catheter?

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Operation Management: If the hospital orders correctly what is its annual minimum
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