(Comprehensive EOQ calculations) Knutson Products Inc. is involved in the production of airplane parts and has the followinginventory, carrying, and storagecosts:

1. Orders must be placed in round lots of 100 units.

2. Annual unit usage is 150,000. (Assume a50-week year in yourcalculations.)

3. The carrying cost is 15 percent of the purchase price.

4. The purchase price is $30 per unit.

5. The ordering cost is $300 per order.

6. The desired safety stock is 4,000 units.(This does not includedelivery-time stock.)

7. The delivery time is 5 week.

Given the foregoinginformation:

a. Determine the optimal EOQ level.

b. How many orders will be placedannually?

c. What is the inventory orderpoint? (Thatis, at what level of inventory should a new order beplaced?)

d. What is the average inventorylevel?

e. What would happen to the EOQ if annual unit sales doubled(all other unit costs and safety stocks remainingconstant)? What is the elasticity of EOQ with respect tosales? (Thatis, what is the percentage change in EOQ divided by the percentage change insales?)

f. If carrying costsdouble, what will happen to the EOQ level? (Assume the original sales level of 150,000 units.) What is the elasticity of EOQ with respect to carryingcosts?

g. If the ordering costsdouble, what will happen to the level of EOQ? (Again, assume original levels of sales and carryingcosts.) What is the elasticity of EOQ with respect to orderingcosts?

h. If the selling pricedoubles, what will happen to EOQ? What is the elasticity of EOQ with respect to sellingprice?