Now assume Mr. Busfield must arrange for inbound transportation of the measuring cups since Hogan accepts ownership of products at the supplier's shipping point. Quantities of fewer than 4000 measuring cups cost 5 cents per unit to ship.
Quantities of 4000 and above cost 4 cents per unit to ship. Determine the difference in total costs associated with an EOQ of 4000 units and the EOQ level found in part (a) when transportation costs must be considered.