Links Unlimited is a golf specialty store located in southern British Columbia. It buys golf balls at $30 per dozen from its wholesaler. All purchase orders are authorized by department managers, who are paid weekly salaries of $1,200 to work 40 hours. On average, it takes a manager about 10 minutes to gather the information required to produce a purchase order. When not performing administrative tasks, such as placing orders, hiring, scheduling and training staff, and attending meetings, managers spend their time selling.

Once the purchase order information is collected, it is entered into a computerized purchase order form by a part-time employee hired on an hourly basis, at $16 per hour, to do data entry. On average it takes this person 15 minutes to enter an order, check it, and email the completed order to the supplier.

When the order arrives, it is unloaded from the truck and placed in inventory by the stock supervisor, who is paid $21 per hour. It takes 20 minutes to unload and store each order. Rent, insurance, and taxes for each dozen golf balls in inventory amounts to $1.00 per year.

Links Unlimited will sell about 6,000 dozen golf balls evenly throughout the year where each salesperson generates weekly sales with a contribution margin of $4,000. In fact, the store is so busy that part-time employees, who are paid $15 per hour, are constantly used to help with sales. Links Unlimited desires a 10% return on any investment that it makes.

Required: 1. What is the EOQ in dozens? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

2. Notwithstanding the answer to (1), and assuming that Links Unlimited places order sizes of 200 dozen evenly throughout the year, what are the total annual inventory expenses to sell 6,000 dozen golf balls?

3. Suppose that by integrating its ordering system with its main supplier and improving the inventory receiving process, Links Unlimited can lower its total cost of placing each order to $12. Recalculate the EOQ and the total annual inventory expenses to sell 6,000 dozen golf balls. (Round EOQ value to the nearest whole number, and final answer to 2 decimal places.)