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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.    

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      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.

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