Gamer Depot purchases one model of computer at a wholesale cost of $300 per unit and resells it to end consumers. The annual demand for the company's product is 603,000 units. Ordering costs are $1,235 per order and carrying costs are $80 per computer, including $40 in the opportunity cost of holding inventory.

Requirement 1. Compute the optimal order quantity using the E00 model. Begin by selecting the formula used to calculate EOQ. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity.) 2 The optimal order quantity is . (Round your nal answer to the nearest whole number.) Requirement 2. Compute (a) the number of orders per year and (b) the annual relevant total cost of ordering and carrying inventory. (a) Compute the number of orders per year. Determine the formula used to calculate number of orders per year and then calculate the number of orders per year. (Round your answer up to the nearest whole number.) Orders per year ( / ) ( / ) (b) Compute the annual relevant toml cost of ordering and carrying inventory. (Round your answers to the nearest whole dollar.) The total relevant ordering costs are The total relevant carrying costs are The annual relevant total cost of ordering and carrying inventory are D. Requirement 3. Assume that when evaluating the manager, the company excludes the opportunity cost of carrying inventory. If the manager makes the E00 decision excluding the opportunity cost of carrying inventory, the relevant carrying cost would be $50, not $80. How would this affect the E00 amount and the actual annual relevant cost of ordering and carrying inventory? Calculate the revised EOQ using the new carrying cost of $50. (Round your answer to the nearest whole number.) The optimal order quantity is Now nd the revised total relevant ordering costs using the new carrying cost of $50. (Round your answer to the nearest whole dollar.) The total relevant ordering costs are Now nd the revised total relevant carrying costs using the new carrying cost of $50. (Round your answer to the nearest whole dollar.) The total relevant carrying costs are The revised annual relevant total cost of ordering and carrying inventory is . (Round your answer to the nearest whole dollar.) Requirement 4. What is the cost impact on the company of excluding the opportunity cost of carrying inventory when making EOQ decisions? (Enter positive amounts only. Round your answer to the nearest whole dollar.) Because managers will choose make the E00 decision excluding the opportunity cost of carrying inventory by using the carrying cost of $50, not $80, the cost to the company will be E] than it would be if managers were evaluated based upon all carrying costs. Why do you think the company currently excludes the opportunity costs of carrying inventory when evaluating the managers performance? 0 A. Gamer Depot probably does not include the opportunity costs of carrying inventory because it is tracked by the manufacturing system. 0 B. Gamer Depot probably does not include the opportunity costs of carrying inventory because it is not tracked by the nancial accounting system. 0 C. Gamer Depot probably does not include the opportunity costs of carrying inventory because it is tracked by the human resource system. 0 D. Gamer Depot probably does not include the opportunity costs of carrying inventory because it is tracked by the distribution system. What could the company do to encourage the manager to make decisions more congruent with the goal of reducing total inventory costs? The company could change the V Even though this would involve an additional calculation, it I encourage managers to make optimal decisions more congruent with the goal of reducing total inventory costs