QUESTION 4 [20 MARKS] (a) The following data for the current year relate to a sterile pack purchased by the Apollita Hospital: Annual demand 90,000 units Annual holding cost per unit $8 Cost of placing an order $25 From the start of year the cost of placing an order will rise by $11 but all the other data will remain the same. The hospital bases its purchasing decisions on the Economic Order Quantity (EOQ) model. REQUIRED Calculate the EOQ for: (1) The current year, and (ii) Next year. [5 marks] (iii) Calculate the increase in total annual cost of ordering and holding inventory of the sterile packs to the hospital for next year. [5 marks] (c) Identity TWO major costs associated with each of the following: (1) Holding inventory and (ii) Ordering inventory. [2 marks] Explain the following terms relevant to a business pricing policy: (iii) Price discrimination (iv) Loss leader (v) Maximum pricing (vi) Price bidding