## Question

# A store order bottles of shampoo throughout the year. Over time, the store has learned that the annual demand D for shampoo is constant, i.e.,

A store order bottles of shampoo throughout the year. Over time, the store has learned that the annual demand D for shampoo is constant, i.e., there is no variability. Currently, the store decides to use the optimal EOQ value Qopt every time they order a new shipment of shampoo bottles from their supplier. Assume that the annual total cost TC(Qopt) incurred by the store is $5,000.

How much does the store pay each year in holding costs (i.e., what is the annual holding cost)?

If the store ordered 2Q_{opt} bottles every order as opposed to Q_{opt} bottles, then what would be the annual total cost incurred?

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