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Problem 7-9 (Algo) Ergonomics Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 28 units per day Average lead time = 35 days Item unit cost = $55 for orders of less than 250 units Item unit cost = $53 for orders of 250 units or more Ordering cost = $30 Inventory carrying cost = 20% The business year is 250 days Assume there is no uncertainty at all about the demand or the lead time. a. Calculate EOQ if unit cost is $55 and $53. (Note: These EOQs do not need to be feasible in their price range.) (Round up your answers to the next whole number.) Answer is complete and correct. EOQ Unit cost at $55 196 units Unit cost at $53 200 units b. Calculate annual ordering costs for each alternative? (For the first value, use your rounded EOQ from Part a. For the second value, use the lowest feasible order quantity needed to qualify for that price level. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Annual Ordering Cost Unit cost at $55 1,071.43 Unit cost at $53 1,055.28 c. Calculate annual inventory carrying costs for each alternative? (For the first value, use your rounded EOQ from Part a. For the second value, use the lowest feasible order quantity needed to qualify for that price level. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Annual Inventory Carrying Cost Unit cost at $55 1.078.00 Unit cost at $53 1,060,00 d. Calculate annual product costs for each alternative? (Enter your answer as a whole number.) Answer is complete and correct. Annual Product Cost Unit cost at 555 385.000 Unit cost at $53 371,000 e. Using your rounded answers from Ports b, cand d, what will be the total cost for each oternative? (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Unit cost at $55 Unit cost at 553 Total Cost 387,149 43 373.110.00 e. Using your rounded answers from Parts b, c and d, what will be the total cost for each alternative? (Round your answers to decimal places.) Answer is complete but not entirely correct. Total Cost Unit cost at $55 387,149.43 Unit cost at $53 373,110,00 f. Based on your analysis, how many chairs should they order at a time? (Enter your answer as a whole number) Answer is complete but not entirely correct. Order Quantity 200 chairs g. How much can the firm save annually by using the order quantity in Part finstead of the first EOQ shown in Part a? (Round you answer to 2 decimal places.) Answer is complete but not entirely correct. Amount saved 14,030 43