Estimated Demand for Gold-Filled Lockets at Sam's Bargain Jewelry and Housewares

Estimated demand for gold-filled lockets at Sam's Bargain Jewelry and Housewares is 2,420 lockets a year. Manager Veronica Winters has indicated that ordering cost is $45, and that the following price schedule applies: 1 to 599 lockets, $.90 each; 600 to 1,199 lockets, $.80 each; and 1,200 or more, $.75 each. What order size will minimize total cost if carrying cost is $.18 per locket on an annual basis?
D = 2,420 lockets per year
S = $45
H = $.18 per locket

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