A company has annual demand for its product of 50,000 units. Each unit costs

1.50. Ordering costs are 55 per order and the annual holding cost per unit is 1.

a) Using the information above, calculate the Economic Order Quantity (EOQ).

b)Using the information above, determine if the optimum ordering quantity would change if the supplier offered a discount of 1% as long as at least 4,000 units were ordered each time.

c)Recommend if the company should increase the number of units ordered