A$).$ Maxi department store sells $175$ units per month of a certain large bath towel. The unit cost of a towel to the store is $$2\mathrm{.}50$ and the cost of placing an order has been estimated to be $$12\mathrm{.}00.$ The store uses an inventory carrying charge of I $=27\%$ per year. Determine $($a$)$ the optimal order quantity, $($b$)$ the order frequency, and $($c$)$ the annual holding and setup cost. If$,$ through automation of the purchasing process, the ordering cost can be cut to $$4\mathrm{.}00,$ what will be $($d$)$ the new economic order quantity, $($e$)$ the order frequency, and $($f$)$ annual holding and setup costs? Explain these results. $(5+2+6+4+2+6$ marks$)$

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B$).$ A company is presently ordering on the basis of an EOQ. The demand is $10,000$ units a year, unit cost is $$10,$ ordering cost is $$30,$ and the cost of carrying inventory is $20\%.$ The supplier offers a discount of $3\%$ on orders of $1000$ units or more. What will be the saving $($loss$)$ of accepting the discount? $(4+4+4+310$ marks$)$

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