PC Calculators sells calculators that it purchases for $15 each. It costs PC $60 each time calculators are ordered, and carrying costs are 20 percent of the calculator's purchase price. Annual demand is 100,000 calculators.
(a) Compute the EOQ.
(b) Compute the inventory costs if PC orders
(i) the EOQ amount,
(ii) 1,000 calculators, and
(iii) 2,500 calculators.