supply, the cost per unit is $12, order cost is 18 per order, and carrying cost is 25 per cent. You are savings per year by buying in economical lot quantities, y27 2 18 3 3 EOQ - V2 AB/C (2x2,400 x81/3 - 114 units Total carrying cost - 2,400 x 12 x 25/100-37,200 Carrying cost per unit (C) - 7,200 + 2,400 units - 33 Savings due to EOQ Particulars Present With EOD 1. Size of order (units) 1.200 114 2. Number of order 22 3. Cost per order 28 4. Total ordering cost (2 x 3) 16 176 5. Carrying cost per unit 6. Average inventory (units) 600 (1,200 + 2) 57 (114 + 2) 7. Total carrying cost (56) 1,800 171 8. Total cost (4+7) 1,816 347 Differential costs (savings) 81,469 P.8.5 Ganges Pump Company Ltd. uses about 75,06% valves per year and the usage is fairly constant at 6,250 per month. The valve cost of $1.50 per unit when bought in large quantities, and the carrying cost is estimated to be 20 per cent of average inventory investment on an annual basis. The cost to place an order and process the delivery is 18. It takes 45 days to receive delivery from the date of an order and a safety stock of 3.250 valves is desired. You are required to determine: (1) The most economical order quantity and frequency of orders, (ii) The order point, and (iii) The most economical order quantity if the valves cost 34.50 each instead of 1.50 each