Question: (read text pages 209 to 211 - until ROP formula. Also read Example 7.2 on page 210) and solve following problems 1. Pam runs mail

(read text pages 209 to 211 - until ROP formula. Also read Example 7.2 on page 210)

and solve following problems

1. Pam runs mail order business for gym equipment. Annual demand for Tricoflexers is 16,000. The holding cost per unit per year is $2.50 and the cost to place an order is $50. What is the economic order quantity? (show the calculations)

2. Using the same holding and ordering costs as in problem 1, suppose the demand for TricoFlexers doubles to 32.000 per year, does the EOQ double? If not, explain the reason.

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