Question $3-$ Show your workings.

Calling Sdn$.$ Bhd$.($CSB$)$ is selling deluxe cordless telephones. It sells the telephone for RM$79\mathrm{.}95$ which costs RM$40$ each. Last year the company sold $85,000$ units. The supplier of the telephone is its subsidiary Calling Com Sdn$.$ Bhd$.($CCSB$)$ which recently announced a price increase of RM$5.$ This will force CSB to increase the selling price to RM$84\mathrm{.}95$ but anticipate that the demand for the telephone for this coming year to decline by $\backslash (10\backslash \%\backslash ).$ It costs CSB RM$400$ to place an order and the carrying costs of the deluxe telephone are $\backslash (12\backslash \%\backslash )$ of the costs.

The supplier has also indicated that due to the increase in processing costs, it will accept orders only in round lots of $1,000$ units at the quoted price of RM$45.$ An additional charge of RM$50$ per order is made on any fractional order.

Based on the above information, you are required to:

a$.$ Compute the economic order quantity.

b$.$ Compute the total costs of inventory if the Economic Order Quantity $($EOQ$)$ is ordered.

$(10$ Marks$)$

c$.$ Compute the total costs of inventory if each order is rounded to the nearest round lot of $1000$ units.

$(8$ Marks$)$

d$.$ What order size should the company place, and how much it will save?

$(6$ Marks$)$

$($Total:$30$ Marks$)$