What are the steps involved in solving these problems?

1: The frisco roughriders wants to explore their inventory policy on purchasing of hot dogs. They are currently using 200 cases of hot dogs per month and ordering 400 cases of hot dogs at a time.

order cost : $15

holding cost per case: $0.20

a. under their current ordering scheme, what is the total cost?

b. using an EOQ model, what would their total costs?

c. how much money does this save in total?

d. their supplier has offered an alternative deal of placing a monthly order of 200 cases of hot dogs. In exchange for the fixed monthly order, the supplier will change the order cost to a $10 each month. should they take the supplier up on this offer?

2: Binary Choice sells new desktop and laptop computers. Their supplier for charges $60 per order, and holding cost if $150 per unit. They sell 50 computers per month. The manufacturer has offered the following price schedule:

Order Quantity | Price per unit

<11 | $520

12 to 64 | $500

65 to 128 | $495

>128 | $485

a. what order quantity minimizes total annual inventory cost?

b. the supplier has offered to be a drop shipper, i.e., they will ship directly to the customer. In exchange, they will increase the unit price to $515 per computer, but not charge the ordering costs and all inventory will be held at the supplier. From a purely financial standpoint, should we take them up on their offer?