11 EOQ. You have been given the following information relating to an item sold by Paragon Computer Products:

1) Annual demand 50,000 units 2) Ordering cost per order £40 3) Carrying cost per item per year £8 4) Purchase price per unit £4.50 Calculate:

(a) the economic order quantity (EOQ), and the number of orders;

(b) the total amount to be paid for each order;

(c) the minimum total cost of carrying this item in stock each year;

(d) the total cost of ordering and carrying this item in stock, if the company were to place either 50 or 100 orders each year; and

(e) the reorder point, assuming a lead time of 2 days and a 365 day year.

(f) the level of safety stock, if management has determined a reorder level of 410 units.