## Inventory Related Problem

A firm's demand for a product is continuous and fixed at a rate of 2 units a day. The administration costs of placing an order with the firm's supplier is $16 and the firm estimates that its inventory holding cost is 16 cents per unit per day. If the product costs$5, what is the economic order quantity and the economic order time?

this is what I get:

x(demand) = 2
h (holding cost) = $0.16 k(fixed cost)=$16
c (variable cost) = \$5

the economic order quantity (Q) is (2kx/h) square rooted.
the economic order time is Q/x

Q=20
T=10

I'm struggling the following question though:

the firm is offered a reduction for bulk purchases. if it order 30 or more units it can obtain a 10% discount and if it orders at least 50 units it can obtain a 20% discount. should the firm change its inventory policy?

any help appreciated