Henry Crouch's law office has traditionally ordered ink refills 70 units at a time. The firm estimates that carrying cost is 40% of the $9unit cost and that annual demand is about 240 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optimal?

a) For what value of ordering cost would its action be optimal?

Its action would be optimal given an ordering cost of $.....? per order

(round your response to two decimalplaces).

b) If the true ordering cost turns out to be much greater than your anser to part (a) what is the impact on the firm's ordering policy?

(A. The order quantity should not be changed.) (B.The order quantity should be decreased) (C.The order quantity should be

increased)