Question: Using the appropriate model (EOQ or EPQ) answer the following questions: a) In the basic EOQ model, if the cost of placing an order doubles,

Using the appropriate model (EOQ or EPQ) answer the following questions:

a) In the basic EOQ model, if the cost of placing an order doubles, and all other values remain constant, will the EOQ value increase or decrease and by what percentage?

b) A product whose EOQ is 40 units experiences a decrease in ordering cost from $90 per order to $10 per order. The revised EOQ is?

c) A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The lead-time is doubling from 2 days to 4 days, what is the impact to the economic order quantity? Why?

d) In the basic EPQ model, if the cost of holding a unit of inventory for a year doubles, and all other values remain constant, will the EPQ value increase or decrease and by what percentage?

e) A production order quantity problem has a daily demand rate = 10 and a daily production rate = 40. The production order quantity for this problem is approximately 612 units. What is the average inventory for this problem?

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