Question: Henry Crouchs law office has traditionally ordered ink refills 60 units at a time. The firm estimates that carrying costs is 40% of the $10

Henry Crouchs law office has traditionally ordered ink refills 60 units at a time. The firm estimates that carrying costs is 40% of the $10 unit cost and that annual demand is about 240 units per year. The assumptions of the basic EOQ model are thought to apply.

  1. For what value of ordering cost would its action be optimal?
  2. If the true ordering cost turns to be much greater than your answer to (a), what is the impact on the firms ordering policy?

PLEASE SHOW ALL YOUR WORK AND ANSWER ALL PARTS A AND B. THANK YOU!

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