Lightways Diversified Group Inc. has the following subsidiary companies:

1.) Gilmore Company has material that has a P7 per meter carrying cost per year. This textile is used at a rate of 25,000 meters per year, and ordering costs are P5 per order.

a. What is the economic order quantity for this fabric.

b. What are the annual inventory costs for this company if it orders in this quantity.

2.) There are weaknesses associated with several assumptions of EOQ model employed by Santolan. What are these weaknesses.