Question: Metro life orders letterhead stationary from an office products firm in boxes of 500 sheets. The company uses 6500 boxes per year. Annual carrying costs are $3.00 per box, and ordering costs are $28. The following discount price schedule is provided below:

Order Quantity (Boxes) Price per box

1000-2999 14.00

3000-5999 13.00

6000 + 12.00

Determine the optimal order quantity and total annual inventory cost for boxes of stationary if the carrying cost is 20% of the price of a box of stationary.