Question: The total inventory cost includes: Ordering Costs: , where is the order quantity ( EOQ or 8 ) . Holding Costs: , as on average

The total inventory cost includes:
Ordering Costs:
, where
is the order quantity (EOQ or 8).
Holding Costs:
, as on average half of the order quantity is held in inventory.
Let's perform these calculations.
Explanation:
The Economic Order Quantity (EOQ) for your situation is approximately 18.17 kayaks per order.
The total annual inventory cost when using the EOQ method is approximately .
The total annual inventory cost with your current ordering quantity of 8 kayaks is about
.

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