QUESTION 9 (Continued) (c) Total Costs(100 Gallon Drums) (pxs)+|o×|+Cx =(S50×2500+110×250+|S10x71 71 125000+$352+$355 =$125707 Total Costs(1 000 Gallon Drums): =(pxS)+ox2 +Cx 250 8 =(S450×250)+$10× $90× =$112500+$313+S360 =$113173 Conclusion: Order the 1 000 gallon drums in the eoQ of 8 drums. The firm will be better off by $12 534. It will save $12 500 on the cost of the inventory plus a further $34 on the inventory policy costsAugust 2003 QUESTION 9 (Continued) (c) Total Costs (100 Gallon Drums): ( ) = $125 707 = $125 000 + $352 + $355 2 71 + $10 71 2 500 = ($50 2 500) + $10 2 Q + C Q S TC = p S + O                                 Total Costs (1 000 Gallon Drums): ( ) = $113173 = $112 500 + $313 + $360 2 8 + $90 8 250 = ($450 250) + $10 2 Q + C Q S TC = p S + O                                 Conclusion: Order the 1 000 gallon drums in the EOQ of 8 drums. The firm will be better off by $12 534. It will save $12 500 on the cost of the inventory plus a further $34 on the inventory policy costs