Question: Morgan Arthur has spent the past few weeks determining inventory costs for Armstrong, a toy manufacturer located near Cincinnati, Ohio. She knows that annual demand will be 30,000 units per year and that carrying cost will be $1.50 per unit per year. Ordering cost, on the other hand, can vary from $45 per order to $50 per order. During the past 450 working days, Morgan has observed the following frequency distribution for the ordering cost:
Morgan's boss would like Morgan to determine an EOQ value for each possible ordering cost and to determine an EOQ value for the expected ordering cost.