Answers to the following questions:
1. Derive the EOQ’s, and explain how it works. Illustrate your answer.
2. What is Home Depot’s EOQ for the deluxe toilet units?
3. Using the EOQ, what is the average inventory, number of orders per year, and the total annual cost of maintaining the inventory of deluxe toilet units?
4. What would the EOQ be if expected sales were 2,000 units per year, ordering cost was $160, and the carry cost was $200?
5. Explain the main differences between the EOQ and the Baumol’s model.
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