The distributor of lighting system mentioned in Problem 16.8 has decided to implement a Lean management program. As a result, the firm has signed a long-term contract with a supplier to place orders online, which will reduce ordering cost to LE 100 per order, but the holding cost will increase to LE 20 per unit per year.

a) What is the new EOQ?

b) What is the total cost of inventory?

c) How many orders will be placed per year? L01