Litespeed Products buys 200,000 motors per year from a supplier that can fulfill orders

within two days of receiving them. Litespeed transmits its orders to this supplier elec-

tronically so the lead time to receive orders is two days. Litespeed's order cost is about

$295 per order and its carrying cost is about $37 per motor per year. The firm maintains a

safety stock of motors equal to six days usage. Assume a 365-day year.

If Litespeed has an opportunity to reduce by 10 percent either its order cost or its car-

rying cost, which would result in the lowest total costat the associated new EOQ?