What MOQ would produce the same total relevant costs for the two alternatives? $($Hint: use

Goal Seek.$)$ Is this useful information? Explain.

$2.$ If the supplier insists on $1,000$ units for the MOQ, what discount price should Milo try to

negotiate?

$3.$ Does increasing the MOQ always increase the inventory carrying costs?

$4.$ What is the effect of the order quantity on annual ordering cost, annual holding cost, and

annual purchasing cost?

$5.$ Create an $$XY scatter chart$$ like the one shown in Figure $2,$ which will automatically update

whenever new values are entered in the input section of the worksheet. Hint: First create a

data table showing how TOC, TCC$,$ and $($TOC$+$TCC$)$ vary with AOQ. Then select the table

and use Excel$$s chart wizard button $($shown below$)$ to create the chart.

$6.$ Which would you rather have: a reduction in the MOQ or a reduction in the price? Why?

$7.($Additional question for extra credit of $0\mathrm{.}5$ pt$)$: In Q$1$ and Q$2,$ you have found the

break$-$even MOQ given the discount $(1\%)$ and the break$-$even discount given MOQ $(1000$

units$).$ In reality, you usually can negotiate a pair of MOQ and discount. Can you construct a

table that provides acceptable combination of MOQ and discount $($and corresponding

savings$)$ to help Milo with negotiation?