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Part 1
EOQ analysis   Tiger Corporation purchases
1,170,000
units per year of one component. The fixed cost per order is
​$22.
The annual carrying cost of the item is
27.7​%
of its
​$2.39
cost.a. Determine the EOQ if​ (1) the conditions stated
above​ hold, (2) the order cost is zero rather than
​$22​,
and​ (3) the order cost is
​$22
but the carrying cost is
​$0.01.
b.  What do your answers illustrate about the EOQ​ model?
Explain.
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Part 1
a. ​ (1) If there are no changes in the​ costs, the
EOQ is
enter your response here
units.  ​(Round to the nearest integer. For​ infinity,
input​ INF)
Part 2
​(2) If the fixed cost per order is​ $0, the EOQ is
enter your response here
units.  ​(Round to the nearest integer. For​ infinity,
input​ INF)
Part 3
​(3) If the annual carrying cost of the item is
​$0.01​,
the EOQ is
enter your response here
units.  ​(Round to the nearest integer. For​ infinity,
input​ INF)
Part 4
b.  Is the following statement about the EOQ model true
or​ false?  
▼
False
True
. ​(Select from the​ drop-down menu.)​"The EOQ model is not
useful when ordering costs are zero. As shown in part
a​,
when the fixed cost per order is zero the model is not
realistic. With zero ordering costs the firm is shown to never
place an​ order."