MoTe Enterprises has just employed a new managing director

MoTe Enterprises has just employed a new managing director. On his first day he consults with you and is very concerned about the basic order quantity of 400 units of a certain raw material. He is also concerned about the number of orders and the time between the orders for this material. As he is an accountant by profession, he asks you the following questions; a) What is the impact if the demand is increased by 400% b) What is the impact if the ordering cost is reduced to 25% c) What is the impact if the holding cost is reduced to 25% Provide your answers related to the impact on optimum order quantities, number of orders and time between the orders in each case. Advise him on the best option.

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