Peekay Company Ltd has been buying a given item in lots of 1,200 units which is a six months’ supply, the cost per unit is `12, order cost is `8 per order, and carrying cost is 25 per cent. You are...

Peekay Company Ltd has been buying a given item in lots of 1,200 units which is a six months’ supply, the cost per unit is `12, order cost is `8 per order, and carrying cost is 25 per cent. You are required to calculate the savings per year by buying in economical lot quantities.