3. Anna at Czech bakery uses high quality chocolate in her famous Prague cake. Although it is a small store, Anna uses 1000 pounds of chocolate per month. Anna has purchased chocolate from Nestle twice a month, 500 pounds each, $9.00 per pound. The estimated holding cost is $4.25 per pound, and the ordering cost is $50 for each order. Recently Anna started considering retiring and her son Jacob who held an accounting degree started reviewing the operation. Jacob negotiated the chocolate price with a new supplier US Food, and obtained the following price incentives. Jacob estimates the holding cost in 35% of the unit price and the ordering cost is $50 for each order. US Food Quantity (lbs.) 1-399 400-799 Price ($/b.) $8.10 $7.85 $7.60 $7.45 800-1,199 1,200+ a) Jacob calculates the total annual cost (annual ordering cost + annual holding cost). How much is the total annual cost under Anna's operation. b) Jacob is interested in EOQ under Anna's operation. Calculate EOQ. c) After Anna's retirement, Jacob plans to follow the Quantity Discount Model because US Food gives him price incentives. If Jacob uses the Quantity Discount Model, what quantity should be ordered in each order? d) What is the total cost for the most economic order size/= the quantity you obtain in b))