1. Suppose a firm has been ordering a certain product 300 units at a time, that is, the EOQ* = 300 units. The assumptions of the EOQ model are met reasonably well. The total annual inventory cost at this quantity is $1,200. What is the inventory holding cost for this item? Show your work.
2. Can businesses achieve synergy among functional business units or does it create silos? If there are silos, does this create strategic decisions made in isolation? What type of business situation can silos create a positive environment for strategy implementation?