1. Ex.1
You have been provided the following information:
Material requirements (units) - 6,000
Carrying cost (per unit) - $ .50
Purchasing cost (per order) - $5.00
Required:
1. Determine the optimum order size that minimizes total purchasing and carrying cost.
2. Prepare a graph illustrating the behavior of total carrying cost, total purchasing cost, and total cost

2. Ex.2- Single Discount
The ABC Manufacturing Company annually purchases 10,000 units of material X. The company’s accountant has determined that it costs the company $10.00 each time an order is placed and that the cost of carrying inventory is $1.00 per unit per year. ‘The company has been purchasing material X at a cost of $25.00 per unit. If material X is purchased in quantities of 5,000 or more, then material X can be purchased at $20.00 per unit.
Required:
Determine whether the company should take advantage of the quantity discount?

3. The ABC Manufacturing Company annually purchases 10,000 units of material Y. The company’s accountant has determined that it costs the company $5.00 each time an order is placed and that the cost of carrying inventory is $ .30 per unit. The company has been purchasing material Y at a cost of $.20 per unit; however, the supplier of Y has offered the following discounts:
Required:
In what quantities should the ABC Manufacturing Company order `