Annual demand for an item is 5400 units. Ordering cost is Rs. 600 per order. Inventory carrying cost is 30 per cent of the purchase price per unit per year. The discount on the bulk order given by the supplier follows:

Quantity Price (Rs.)
0 < Q1 < 2400 12
2400 < Q2 < 3000 10
300 < Q3 8

(a) Find the economic order quantity.
(b) If the order cost is changes to Rs. 300 per order, find the optimal order size.