Flanders Bar and Grill orders cleaning supply kits using the EOQ model. The restaurant estimates that it uses 525 kits per year. The purchase price is governed by a quantity discount structure. If the restaurant orders 100 or more units, the price per kit is $11. Below 100 units, the price is $12 per kit. What is total annual cost at the optimal order quantity?
a. $137.50
b. $6437.48
c. $68.74
d. Total annual cost cannot be determined from the information given
b. $6437.48
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