A restaurant Soup4u uses 60 bags of tomatoes each month. The tomatoes are purchased from a supplier for a price of $80 per bag and an ordering cost of $20 per order. Soup4u's annual inventory holding cost percentage is 40%. Soup4u always uses economic order quantity for deciding how many tomato bags it should order. Which of the following will reduce their inventory to 1/3 of its current value without increasing their cost? a) Reduction in ordering cost to 1/9 of it current value
b) Increasing holding cost to 9 times its current value
c) Reduction in ordering cost to 1/3 of it current value
d) Increasing holding cost to 3 times its current value

a) Reduction in ordering cost to 1/9 of it current value

Explanation:

EOQ = √(2SD/H)

EOQ = √[(2 x $20 x 720) / $32] = 30

if you want to reduce inventory to 1/3 of its current value, then the order quantity should be 30 x 1/3 = 10 units per order

a) Reduction in ordering cost to 1/9 of it current value

EOQ = √[(2 x $20/9 x 720) / $32] = 10 ✓

inventory is decreased to 1/3 of current level

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

88 this time can i be brainliest

ty sm

: )