Suppose the Campus Bookstore purchases 40,000 boxes of writing tablets every year at a price of $4.00/box. Ordering costs are $150 per order and carrying costs are 40% per box. Moreover, management likes to keep 300 boxes on hand as safety stock. The tablet vendor now offers a quantity discount of $0.10 per box if the company buys tablets in order sizes of 7,000 boxes.

1. Calculate the EOQ (8 points)
2. Total Inventory Cost at EOQ (8 points):
3. Total Inventory Cost at 7,000 boxes the quantity required to receive a discount (8 points):
4. Should they order 7,000 boxes at a time and take the quantity discount? Why or why not? (6 points)