E Office Supplies, Inc. sells discounted office supplies over the Internet. One popular product sold is legal-size notepads, which are ordered by many law firms.

E Office Supplies, Inc. sells discounted office supplies over the Internet. One popular product sold is legal-size notepads, which are ordered by many law firms. E Office Supplies offers the following quantity discount structure, based on how many dozen notepads are ordered: 1-19 dozen, $21.95 per dozen; 20-99, $19.95 per dozen; 100-199, $18.95 per dozen; 200+, $17.95 per dozen. The law firm of Sanders, Taylor, Hernandez, Donahue and Smith (STHDS) would like to decide how many legal notepads to order using the EOQ model for quantity discounts. Its ordering cost is $35 per order, its anticipated need in the coming year is for 1,500 dozen notepads, and its annual carrying cost rate is 40% of acquisition cost.

a.) How many dozen notepads should they order each time?

b.) What would be the resulting total inventory cost per year (ordering plus carrying plus materials)?

c.) How many orders per year should be expected?

d.) What is the expected maximum inventory level of notepads?

e.) If STHDS has only enough storage space for 150 dozen notepads, how many should they order each time?

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