(Estimate errors) A company has computed its economic order quantity based on the following estimates: annual demand, 75,000 units; ordering cost, $4.25 per order; and carrying cost, $.75 per unit. However, management has now learned that these estimates were wrong. Ordering cost is $3.60 per order and carrying cost is $.90 per unit.

a. Compute the EOQ based on the original costs and the revised costs.

b. Compute the annual ordering and carrying costs based on the original EOQ and the original costs.

c. Compute the annual ordering and carrying costs based on the revised EOQ and revised costs.

d. Assuming the revised costs are the correct ones, compare the costs of order¬ ing and carrying the first EOQ to the costs of ordering and carrying the revised EOQ.