Good Kitchen sells a popular blender with the demand of 175/month. Good Kitchen purchases the blenders from its supplier at the unit cost of $2.50 and the cost of placing an order has been estimated to be $12.00. Good Kitchen uses an inventory carrying charge of I = 27% per year.

Determine (a) the optimal order quantity, (b) the order frequency, and (c) the annual holding and setup cost. If, through automation of the purchasing process, the ordering cost can be cut to $4.00, what will be (d) the new economic order quantity, (e) the order frequency, and (f) annual holding and setup costs? Explain these results.