Question 10.4 Fisherman Company, a regional supermarket chain orders 1,920,000 cartons of frozen fish per year from a Canadian distributor. A two-dozen case of frozen fish delivered to Fisherman's central warehouse costs N480, including freight charges. The company borrows funds at 10 per cent, interest rate to finance its inventories. The Fisherman Company's purchasing agent has calculated that it costs. N1,500 to place an order for frozen fish and that the annual carrying expense (electricity, insurance, handling) is 48 for each carton of fish. 405 i. What is the EOQ? ii. If the Canadian distributor offered a 10 per cent discount of the delivery price for minimum order of 72,000 cartons. What would be the effect on (1) above? (12 marks) ICAN (May 2001) MA