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Consider the following key assumptions: - Holding Costs for Inventory is 25% of COGS - Order Processing Costs are $500 per order. A. Using the
Consider the following key assumptions: - Holding Costs for Inventory is 25% of COGS - Order Processing Costs are $500 per order. A. Using the EOQ methods outlined in the chapter, how many of Item P2RF05E1AB should an inventory planner order one time? B. Assume all conditions in Question A hold, except that the supplier now offers a quantity discount in the form of absorbing all or part of the order processing costs. For orders of 30,000 units or more, the supplier will absorb all the order-processing costs; for orders between 20,000 and 30,00 units, the supplier will absorb half. What is the new EOQ? (Please layout your answer in the form of a table identifying \# of orders per year, holding costs, ordering costs and total costs in order to identify your answer)
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