a) Henry Crouch's law office has traditionally ordered ink refills 55 units at a time. The firm estimates that carrying cost is 40% of the $11 unit cost and that annual demand is about 240 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal?

a) For what value of ordering cost would its action be optimal?

Its action would be optimal given an ordering cost of $ per order (round your response to two decimal places).

b) If the true ordering cost turns out to be much greater than your answer to part (a), what is the impact on the firm's ordering policy?

The objective is to minimize the total cost. Using the EOQ model, the optimal order size Q=2DSH. Use the fact that as the ordering cost S increases, the optimal order size will increase.

If the true ordering cost S turns out to be much greater than $25.85, what is the impact on the firm's ordering policy? Choose the correct answer below.

A.The order quantity should be decreased.

B.The order quantity should not be changed.

C. The order quantity should be increased.