Henry Crouch's law office has traditionally ordered ink refills 55 units at a time. The firm estimates that carrying cost is 35% of the $9 unit cost and that annual demand is about 235 units per year. The assumptions of the basic EOQ model are thought to apply. For what value of ordering cost would its action be optional?
a) For what value of ordering would its action be optional?
Its action would be optimal given an ordering cost of $---- per order (round your response to two decimal)
b) If the true ordering cost turns out to be much greater than your answer to part (a) what is the impact on the firm's ordering policy?