Mafruha Companys annual demand for its only product, MF 690, is 30 000 units. Mafruha is currently analysing possible combinations of relevant carrying cost per unit per year and relevant ordering cost per purchase order, depending on the companys choice of supplier and average levels of inventory. This table presents three possible combinations of carrying and ordering costs.

Relevant carrying cost per unit per year	Relevant ordering cost per purchase order
$20	$800
$40	$400
$80	$200

Required:

1. For each of the relevant ordering and carrying-cost options, determine:

a. EOQ; and

b. Annual relevant total costs.

2. How does your answer to requirement (a) give insight into the impact of changes in relevant ordering and carrying costs on EOQ and annual relevant total costs? Explain briefly.