Q2. Problem solving

At a computer retail store, annual demand of a particular computer is 1,000 per month, unit cost of the computer is $500. Holding cost of a computer per year per item is 20% of the unit cost. If the ordering cost is $4000 per order. Determine the following:

1. Optimal or economic order quantity (EOQ) of the computer.

2. Total annual inventory cost for the EOQ?

3. Total annual inventory cost of order quantity: (i) 20% more of EOQ, (ii) 20% less of

EOQ

4. For the EOQ, determine the time between two orders, and how many orders need to

place in a year