Question 1: Frame-Up, a self-service picture framing shop for tourists in Sevilla, Spain, orders 3000 meters of a certain molding every month. The order cost is €40 and the holding cost is €0.05 per meter per year. What is the current annual inventory cost? What is the maximum inventory level? What is the EOQ?
Question 2: The Corner Convenient Store (CCS) in northern Chicago receives orders from its distributor in three days from the time an order is placed. Light Cola sells at the rate of 860 cans per day. (It can sell 250 days of the year.) A six-pack of Light Cola costs CCS $1.20. Annual holding cost is 10 percent of the cost of the cola. Order cost is $25.00. What is CCS's EOQ?