Question: 1 Understanding the EOQ Model Scenario 1: Suppose we are analyzing the weekly demand for a given product that averages E[D] = 1,500 units with

1 Understanding the EOQ Model Scenario 1: Suppose we are analyzing the weekly demand for a given product that averages E[D] = 1,500 units with a standard deviation of op = 800 units. Each product costs $10, and incurs a holding cost of 25% per year to carry inventory. The company has an opportunity to set up a warehouse in the local area to avoid the international shipping costs. Each order shipped from Europe currently incurs a fixed transportation and delivery cost of $10,000. 1. Considering 52 weeks in a year, what is the approximate EOQ? (a) 24,980 units (b) 3,464 units (c) 78,994 units

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