In the quantity discount model in Example 13.2, the minimum total annual cost in region 3 is clearly the best. Evidently, the larger unit purchase costs in the other two regions make these two regions...

In the quantity discount model in Example 13.2, the minimum total annual cost in region 3 is clearly the best. Evidently, the larger unit purchase costs in the other two regions make these two regions unattractive.

Could region 1 ever be best? What about region 2? To answer these questions, assume that there is no price break at all. Specifically, assume that the unit purchase cost is always $26. What is the optimal order quantity with this assumption? How does this help answer the preceding questions?

Example 13.2