Suppose management of Foods Galore (in solved problem 3 above) found that it had drastically underestimated its annual inventory carrying cost. Rather than the 10% carrying cost assumed in the solved problem, carrying cost is actually 25%. Rework all parts of the solved problem assuming the 25% carrying cost.
a. Economic Order Quantity
b. Economic Order Quantity at $18
c. Standard Deviation of Demand during Lead Time