Wesley Utility Company uses 2,500 units per year which it stores at $0.50 per unit per annum. The cost to place an order is $100.

a) Calculate:

i. The economic order quantity (EOQ)

b) If the company decides to make the items on its own machine with a potential capacity of 5,000 units per year, calculate:

i. The economic order quantity (EOQ)

ii. The annual ordering cost

iii. The annual carrying cost