EOQ

Usually with these types of questions, you work out the EOQ as normal and then determine whether it is worthwhile to take advantage of discounts offered. If it is required that more needs to be ordered than the EOQ to receive a discount then this will impact the costs. Since more stock will be held the holding cost will increase. Since fewer orders will have to be made the overall ordering cost will decrease. A balance must be struck between all the relevant factors to find the optimal order quantity.