For EOQ, the carrying cost is the same as the holding cost; order and set up costs are the same as ordering or purchase cost for each order.

Mustangs Donuts has been buying certain supplies in lots of 900 units every three months. The cost per unit is $12, the ordering cost is $16 per order, and the carrying cost is 25% of the unit cost. 8.1. Calculate the following: 1. Number of units required annually. 2. Number of orders placed per year. 3. What is the average inventory for the supplies? | 4. What is the annual ordering cost? 4 5. What is the annual carrying cost? 6. What is the total annual cost of the inventory? 8.2. A loyal Mustangs Donuts student (Don Utz) Bill from this class talked to the owner about the concept of economic order quantity and how he could save money on his inventory costs by placing orders differently. 1. What did Don suggest as EOQ and the number of orders per year? 2. What was the new total cost of inventory as suggested by Don? 3. How much did Don save the Mustangs Donuts annually