A restaurant consumes wine at the rate of 50 bottles per day. Wine is purchased by the case and there are 13 bottles per case. The current ordering policy generates a total annual holding cost of $5020 and a total annual ordering cost of $3000. Next week the restaurant will switch from the current policy of purchasing 10 cases of wine in each order to purchasing wine based on the optimal FOQ. Which of the following will be a result of this switch in policy a) Less than 10 cases of wine will be bought at a single time.
b) Total annual holding costs will increase.
c) Total annual inventory costs will increase.
d) Total annual ordering costs will decrease.
e) Both (b) and (d) will be results of this switch in policy.