Ergonomics Inc. sells ergonomically designed office chairs. Thecompany has the following information:
Average demand = 35 units per day
Average lead time = 49 days
Item unit cost = $69 for orders of less than 390 units
Item unit cost = $65 for orders of 390 units or more
Ordering cost = $44
Inventory carrying cost = 20%
The business year is 250 days
Assume there is no uncertainty at all about the demand or thelead time.
a. Calculate EOQ if unit cost is $69 and $65.(Note: These EOQs do not need to be feasible in their price range.)(Round up your answers to the next wholenumber.)
b. Calculate annual ordering costs for eachalternative? (Round your answers to 2 decimalplaces.)
c. Calculate annual inventory carrying costsfor each alternative? (Round your answers to 2 decimalplaces.)
d. Calculate annual product costs for eachalternative?
e. What will be the total costs for eachalternative? (Round your answers to 2 decimalplaces.)
f. Based on your analysis, how many chairsshould they order at a time? (Round your answers to 2decimal places.)
  Â
g. How much the firm can save annually by usingthe order quantity in Part f. instead of the first EOQ shown inPart a? (Round your answer to 2 decimalplaces.)
