CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Annual demand is 25,000 kilograms per year. Holding cost is 20 percent per unit per year of the price of copper and the Ordering cost is $30.00. Table 2 that follows, shows the quantity discount schedule price-break: Table 2- Quantity Discount Schedule Quantity (kg) 5,000 and greater than 5,000 3,750 to 4,999 2,500 to 3,749 1,250 to 2,499 1 to 1,249 Price ($) 0.38 0.39 0.40 0.41 0.42 Determine the optimal order size that you would order if you were purchasing copper from CUI.

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