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2. An oil change shop is trying to determine how many cases of engine oil they should order from its distributor. They use 60,000 cases

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2. An oil change shop is trying to determine how many cases of engine oil they should order from its distributor. They use 60,000 cases per year. Annual holding cost is 20% of the item cost. Ordering cost is $8.50 per order. The distributor offers the following quantity discount schedule: a) What is the EOQ for each item cost? b) What is total cost (holding cost + ordering cost + item cost) if they buy at $4.50 per case at the minimum total cost point on $4.50 curve ( EOQ point for $4.50 )? c) What is total cost at the item cost of $4.25 and Q=2000 (lowest allowable order quantity from supplier for this price)? d) What is the final order quantity you recommend (one that results the lowest total cost)

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