A medical clinic dispenses vaccines at a steady rate of 520 doses per month. Each order placed to the vaccine manufacturer incurs a fixed cost of $140. Each vaccine dose held in inventory incurs a holding cost of $3 per year. Required:a. Using the EOQ model, calculate the optimal order quantity, images , and the optimal average cost per year, images. b. Suppose that the fixed cost K increases. Will images increase, decrease, or stay the same? Briefly explain

a) EOQ = 763 vaccines

annual total cost = $2,289.45

b) if order cost increase, then the EOQ will also increase since the total number of orders placed should decrease in order to keep total costs as low as possible.  

Explanation:

EOQ = √(2SD / H)

s = order cost = 140

h= holding cost per unit = 3

d = annual demand = 520 x 12 = 6,240

EOQ = √[(2 x 140 x 6,240) / 3] = 763.15 ≈ 763

annual total cost = [(6,240 / 763) x $140] + [(763 / 2) x $3] = $1,144.95 + $1,144.50 = $2,289.45

if K (I believe K = S) increases to lets says $200:

EOQ = √[(2 x 200 x 6,240) / 3] = 912 units

annual total cost = [(6,240 / 912) x $200] + [(912 / 2) x $3] = $1,368.42 + $1,368 = $2,736.42

if we used EOQ = 763, then:

annual total cost = [(6,240 / 763) x $200] + [(763 / 2) x $3] = $1,635.65 + $1,144.50 = $2,780.15

the correct answer is economics is a game without winners or losers.

unlike sports or games economic is a game without losers or winner rather it is a game where everyone wins. parties of business doing businesses exchange money with each other and hence exchange is done on the basis of goods. one party takes the goods and other sales it so there is winner on both sides. each party values more highly the good it gets than the good it gives up. both sides exchange only because both intend to increase their value. so there is no concept of lose or win.

answer; engaging in effective public relations;