Economic Order Quantity for a Product

A large distributor of oil-well drilling equipment operated over the past 2 years with EOQ policies bases on an annual holding cost rate of 22%. under the EOQ policy, a particular product has been ordered with a Q*=80. A recent eval of holding costs shows that because of an increase in the interest rate associated with bank loans, the annual holding cost should be 27%.

a. what is the new economic order quantity for the product?
b. develop a general expression showing how the economic order quantity changes when annual holding cost rate is changed from I to I’.

See attached file.
A large distributor of oil-well drilling equipment operated over the past 2 years with EOQ policies bases on an annual holding cost rate …

Economic order quantity for a product is determined for oil-well drilling equipment.