Brooklyn Art Design (BAD) produces a single product of XYZ, it requires 0.1 kilogram of raw material and the company produces and sells 400,000 units of the product annually. The cost to place a single order is $15 per hour and the annual carrying cost inventory is 2% per annum The normal time to place an individual order is four (4) hours. Currently, the company orders ten times per year. The main supplier advised the financial controller of BAD that a 5% discount would be given if BAD doubles its current lot size. He also informed that a further 10% would be given if the entity increased its order by 6,000 kilograms above the current lot size. The material is currently bought from its supplier for $60 per kilogram. Required:

a. Calculate the Economic Order Quantity (EOQ).

b. Calculate the total cost based on the EOQ.

C. Calculate the total cost for each individual alternate order quantities, including the current policy.

d. What is the optimal order quantity and why?