Taylor Supply is a wholesaler of office supplies and equipment. Taylor purchases cartons of staples from Barker Manufacturing. Barker offers a price of $7 per carton of staples. Taylor incurs a fixed charge of $90 per order to cover order equipment and clerical costs. Taylor has projected sales to be 220,000 boxes next year. Taylor's accounting department has determined the holding costs relevant for inventory decisions are 28% of unit cost. Further assume that the lead time for each order is equal to the transit time (that is, orders are transmitted, processed, prepared for transportation, and shipped the same day). Also, there is no variability of demand or lead time. Assume Taylor sets Q = 3000 cartons. Which of the following statements is true? Group of answer choices

1 - Order costs will be lower and inventory carrying costs will be higher than optimal.

2 - Order costs will be higher and inventory carrying costs will be lower than optimal.

3 - Order costs and inventory carrying costs will be higher than optimal.

4 - Order costs and inventory carrying costs will be lower than optimal.