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Using the appropriate model (EOQ or EPQ) answer the following questions:
a) In the basic EOQ model, if the cost of placing an order triples, and all other values remain constant, will the EOQ value increase or decrease and by what percentage?
b) A product whose EOQ is 100 units experiences a decrease in ordering cost from $40 per order to $10 per order. The revised EOQ is?
c) A product has a demand of 4000 units per year. Ordering cost is $20, and holding cost is $4 per unit per year. The lead-time is doubling from 2 days to 4 days, what is the impact to the economic order quantity? Why?
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