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Tiger Corporation purchases 1,180,000 units per year of one component. The fixed cost per order is $22 The annual carrying cost of the item is

Tiger Corporation purchases 1,180,000 units per year of one component. The fixed cost per order is $22

The annual carrying cost of the item is 26.1% of its $1.77 cost.

a. Determine the EOQ if (1) the conditions stated above hold, (2) the order cost is zero rather than $22 and (3) the order cost is $22 but the carrying cost is $0.01

b.What do your answers illustrate about the EOQ model? Explain.

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