A local manufacturer uses 8,000 electronic switches boxes a year. Carrying costs are 20% of the cost of the switch per year, and ordering costs are $25 per order. The following price schedule applies. What is the optimal order quantity? Provide all total cost calculations and explain your answer.
Number of Switches Price per Switch
0 – 299 $17.00
300 – 499 $16.00
500 or more $15.00