=+17-17 KK Economic order quantity, effect of parameter changes (continuation of 17-16)

OBJECTIVE 2 Athletic Textiles (AT) manufactures the Bears’ jerseys that Red Revival (RR) sells to its customers. AT has recently installed computer software that enables its customers to conduct ‘one-stop’ purchasing using state-of-the-art website technology. RR’s ordering cost per purchase order will be $22.50 using this new technology.

Required 1 Calculate the EOQ for the Bears’ jerseys using the revised ordering cost of $22.50 per purchase order. Assume all other data from Exercise 17-16 are the same. Comment on the result.