Smithson Hydraulics Inc. carries an inventory of valves that cost $25 each. The firm’s inventory carrying cost is approximately 18% of the value of the inventory. It costs $38 to place, process, and receive an order. The firm uses 20,000 valves a year.

a. What ordering quantity minimizes the inventory costs associated with the valves? (Round to the nearest unit.)

b. How many orders will be placed each year if the EOQ is used?

c. What are the valves’ carrying and ordering costs if the EOQ is used?