Consider again the soap ordering policy for No Tell Motel in Problem 5.
a. Suppose that the weekly demand forecast of 132 boxes is incorrect and actual demand averages only 83 boxes per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error?
b. Suppose that actual demand is 83 boxes but that ordering costs are cut to only $25 by using the Internet to automate order placing. However, the purchasing agent does not tell anyone, and the EOQ is not adjusted to reflect this reduction in Cp. How much higher will total costs be compared to what they could be if the EOQ were adjusted?