Soothing Meadow, a retailer of bed and bath linen, sells 245,000 packages of Mona Lisa designer sheets each year. Soothing Meadow incurs an ordering cost of $83 per purchase order placed with Mona Lisa Enterprises and an annual carrying cost of $11.75 per package. Liv Carrol, purchasing manager at Soothing Meadow, seeks your help: She wants to understand how ordering and carrying costs vary with order quantity. Requirements 1. Complete the table for Liv Carrol. What is the EOQ? Comment on your results. 2. Mona Lisa is about to introduce a Web-based ordering system for its customers. Liv Carrol estimates that Soothing Meadow's ordering costs will be reduced to $47 per purchase order. Calculate the new EOQ and the new annual relevant costs of ordering and carrying inventory 3. Liv Carrol estimates that Soothing Meadow will incur a cost of $1,600 to train its two purchasing assistants to use the new Mona Lisa system. Help Liv Carrol present a case to upper management showing that Soothing Meadow will be able to recoup its training costs within the first year of adoption. a Requirement 1. Complete the table for Liv Carrol. What is the EOQ? Comment on your results. Complete the table for Liv Carrol. (Round purchase orders per year to two decimal places and all other amounts to the nearest dollar.) 2 3 4 5 Annual demand (packages) 245,000 245,000 245,000 245,000 245,000 Cost per purchase order $ 83 $ 83 $ 83 $ 83 $ 83 Carrying cost per package per year $ 11.75 $ 11.75 $ 11.75 $ 11.75 $ 11.75 Quantity (packages) per purchase order 800 1,200 1,860 2,100 2,700 Number of purchase orders per year Annual relevant ordering costs Annual relevant carrying costs Annual total relevant costs of ordering and carrying inventory Next we need to calculate the EOQ. Begin by selecting the formula. (D = Demand in units for one year, P = Ordering cost per purchase order, C = Carrying cost of one unit in stock, Q = Any order quantity) (Round your answer to the nearest whole package.) The EOQ is packages The total relevant ordering and carrying costs, when ordering quantity ranges from 1,200 to 2,700 packages, Requirement 2 Calculate the new EOQ when ordering costs will be reduced to $47 per purchase order. (Round your answer to the nearest whole package.) The EOQ would be packages Now calculate the new annual relevant costs of ordering and carrying inventory with the new purchase order cost. (Do not round until the final amount, then round to the nearest dollar.) Annual relevant ordering costs Annual relevant carrying costs Annual total relevant costs of ordering and carrying inventory Requirement 3 Help Liv Carrol present a case to upper management showing whether or not Soothing Meadow will be able to recoup its training costs within the first year of adoption. (Enter all amounts as positive numbers.) Requirement 3 Help Liv Carrol present a case to upper management showing whether or not Soothing Meadow will be able to recoup its training costs within the first year of adoption. (Enter all amounts as positive numbers.) Annual over old system Training costs Net in first year alone Using the new Mona Lisa system, Soothing Meadow recoup its training costs within the first year of adoption