Question: Sharp, Inc., a company that sells sports shirts, would like to reduce its inventory cost by determining the optimal number of shirts to obtain per order. The annual demand is 250 units; the supplier’s delivering cost is $65 per order and in addition, there is a$6 in-house ordering cost; The manufacturer charges $16.25 per shirt and the inventory carrying cost is estimated to be 8.5% per year.

i) What is Sharp’s EOQ?

If EOQ is ordered,

ii) What are the annual holding costs?

iii) What are the annual ordering costs?