Low Nail Co. now reports the following data:

Annual demand increased to 2,200 kegs per year

Inventory carrying costs has increased to $1.52 per keg

Order processing costs are now only $52.00 per order

Inflation has raised interest to 1.3% per month and kegs to a cost of $42.00 each

Assume that Lows warehouse offers to rent Low space on the basis of the average number of kegs Low will have in stock, rather than on the maximum number of kegs Low would need room for whenever a new shipment arrived. The storage charge per keg remains the same. Does this change the answer to Question 1? If so, what is the new answer? Should Mr. Low take the new warehouse offer? What is your new recommendation for EOQ? Compare the savings in Total inventory-related costs from #1 to convince Mr. Low of your recommendation.

\begin{tabular}{|c|c|c|c|c|} \hline Orders Per Year & Order Size & Annual Processing Costs (\$) & Annual Warehousing Costs (\$) & Total Annual Inventory Costs (\$) \\ \hline \hline 1 & 2,200 & & & \\ \hline 2 & & & & \\ \hline 3 & & & & \\ \hline 4 & & & & \\ \hline 5 & & & & \\ \hline 6 & & & & \\ \hline 7 & & & & \\ \hline 8 & & & & \\ \hline 9 & & & & \\ \hline \end{tabular} The new EOQ, based on the current situation is: Hint. use the table above to identify the minimum Total cost option. Total cost savings (or extra expenses) from #1? Should Mr. Low take the new warehouse offer? What is your new recommendation for EOQ? Compare the savings in Total inventory-related costs from #1 to convince Mr. Low of your recommendation. \begin{tabular}{|c|c|c|c|c|} \hline Orders Per Year & Order Size & Annual Processing Costs (\$) & Annual Warehousing Costs (\$) & Total Annual Inventory Costs (\$) \\ \hline \hline 1 & 2,200 & & & \\ \hline 2 & & & & \\ \hline 3 & & & & \\ \hline 4 & & & & \\ \hline 5 & & & & \\ \hline 6 & & & & \\ \hline 7 & & & & \\ \hline 8 & & & & \\ \hline 9 & & & & \\ \hline \end{tabular} The new EOQ, based on the current situation is: Hint. use the table above to identify the minimum Total cost option. Total cost savings (or extra expenses) from #1? Should Mr. Low take the new warehouse offer? What is your new recommendation for EOQ? Compare the savings in Total inventory-related costs from #1 to convince Mr. Low of your recommendation