Mac-in-the-Box, Inc., sells computer equipment by mail and telephone order. Mac sells 1,200 flat-bed scanners per year. Ordering cost is

Mac-in-the-Box, Inc., sells computer equipment by mail and telephone order. Mac sells 1,200 flat-bed scanners per year. Ordering cost is $300, and annual holding cost is 16 percent of the item’s price. The scanner manufacturer offers the following price structure to Mac-in-the-Box: What order quantity minimizes total annual costs?

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