$()$ operates a megastore featuring sports merchandise. It uses an EOQ decision model to make inventory decisions. It is now considering inventory decisions for its soccer jerseys product line. This is a highly popular item. $()$ manufactures the soccer jerseys that sells to its customers. has recently installed computer software that enables its customers to conduct$$ "one$-$stop" purchasing using$$ state$-$of$-$the$-$art website technology. Data for the year$$ are:

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Each jersey costs and sells for $$$$.$ The $$$ carrying cost per jersey per year comprises the required return on investment of $(\%$ of purchase$$ price$)$ plus in relevant$$ insurance, handling, and$$ theft$-$related costs. The purchasing lead time is $7$ days. is open days a year. $\text{'}$s ordering cost per purchase order will be using this new technology.

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Part $1$

Requirement $1.$ Calculate the EOQ for the soccer jerseys using the revised ordering cost of per purchase order. Comment on the results.

Begin by selecting the formula used to calculate EOQ. $($DDemand in units for one$$ year, POrdering cost per purchase$$ order, CCarrying cost of one unit in$$ stock, QAny order$$ quantity.$)$

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ModifyingAbove EOQ equals StartFraction Upper D Over left parenthesis $1$ plus Upper P right parenthesis Superscript Upper C EndFraction With

ModifyingAbove EOQ equals StartFraction DP Over Upper Q EndFraction plus StartFraction QC Over $2$ EndFraction With

ModifyingAbove EOQ equals StartRoot StartFraction $2$ DP Over Upper C EndFraction EndRoot With Subscript

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Required

$1.$

Calculate the EOQ for the soccer jerseys using the revised ordering cost of per purchase order. Comment on the results.

$2.$

Suppose proposes to$$ "assist" $.$ will allow customers to order directly from the website. would ship directly to these customers. would pay to for every soccer jersey purchased by one of $\text{'}$s customers. Comment qualitatively on how this offer would affect inventory management at $.$ What factors should consider in deciding whether to accept $\text{'}$s $$proposal$?$