Challenge $2$: EOQ $(20$ Points$)$

$($Continue with the same scenario$)$

In the following set of questions, use the Economic Order Quantity $($EOQ$)$ model to inform your decisions

regarding lot size and inventory cost.

Using the Economic Order Quantity $($Q$=$EOQ$)$

$2\mathrm{.}1$ The calculated EOQ is $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.$ USE A WHOLE NUMBER, NO DECIMALS, AND NORMAL

ROUNDING RULES APPLY.

$2\mathrm{.}2$ Using the calculated EOQ, orders will be placed every $\_\_\_\_\_\_\_$ Weeks. DO NOT ROUND to a whole

number $($Show $2$ decimal places$)$

$2\mathrm{.}3$ According to the information supplied, what would be the annual inventory cost if they used the calculated

EOQ $($use your answer for question $2\mathrm{.}1$ as the Q here$)?$ Also, separately identify the annual purchasing cost,

annual holding cost $($AHC$)$ and annual ordering cost $($AOC$).($Show $2$ decimal places$)$

TC $=$

Annual Purchasing Cost$=$

AHC $=$ AOC $=$

$2\mathrm{.}4$ If they could order the EOQ instead of $450,$ how much would this one store stand to save annually?

$2\mathrm{.}5$ Why is this not possible, though? $($Please read the case description carefully. The answer to this question

can be found there$).$