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This is a accounting corporate finance unit question. Pacific Energy Ltd outlet has a throughput of 180 000 litres of Unleaded fuel each week. Purchases

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This is a accounting corporate finance unit question.
Pacific Energy Ltd outlet has a throughput of 180 000 litres of Unleaded fuel each week. Purchases are always made in multiples of 1000 litres. Holding costs including evaporation and variation in volumes due to temperature changes are estimated to be $10 per 1000 litres. Ordering costs are $1 per order. Required: a. What is EOQ, calculate on weekly data of Pacific Energy? b. Given the circumstances above, do you believe Pacific Energy would keep strictly to the EOQ with each order it submits to its suppliers? Why or why not? If you calculated the EOQ on daily turnover data, what values must change to achieve the same EOQ as calculated ona weekly basis? List some management techniques used by financial managers in Pacific Energy to assist in inventory management? [Hint: Pacific Energy's inventory is the Fossil Fuel] c. d. What are the assumptions underlying economic order quantity (EOQ) theory? Relate it to Pacific Energy Ltd

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