Operation Research Case

Operation Research Case

A shopkeeper has a uniform demand of an item X items per month. He buys from a supplier at a costs are RS.6 per item and the cost of ordering is RS10 each time. If the stock holding costs are 20% per year of stock value, how frequently should he replenish his stock?
Suppose the supplier offers a 5% discount on orders between 200 and 999 items and a 10% discount on orders exceeding 1000, can the shopkeeper reduce his cost by taking advantage of either of these discounts?