(Chapter 12: Economic Order Quantity) Taylor Supply is a wholesaler of office supplies and equipment. Taylor purchases cartons of staples from Barker Manufacturing at a price of $7 per carton of staples. Taylor incurs a fixed charge of $90 per order to cover order equipment and clerical costs. Taylor has projected sales to be 220,000 cartons of staples next year. Taylor's accounting department has determined the holding cost percentage as 28% annually.

Assume Taylor sets Q = 6000 cartons. Which of the following statements is true?

Group of answer choices

Annual order cost and annual inventory holding cost will be lower than optimal.

Annual order cost will be lower and annual inventory holding cost will be higher than optimal.

Annual order cost and annual inventory holding cost will be higher than optimal.

Annual order cost will be lower than optimal and annual inventory holding cost will be equal to the optimal.