1. An analysis was done of the Meals on Wheels Center's Purchase Orders for canned green beans to calculate the Economic Order Quantity (EOQ). This was done to predict the optimal balance between order costs and carrying costs.

2. The calculations determined that 1,549 cans should be ordered at a time. There should be 19 orders each year.

3. When ordering at the EOQ of 19 orders, the total ordering costs were $387.30 and total carrying costs were also $387.30.

4. The carrying costs when ordering all 30,000 cans at start of year is $7,500.00. This cost is significantly higher when compared to the EOQ's Carrying Costs of $387.30. The loss would be $7,112.70. Even though a single order would save $367.30 in Order Costs, it is nowhere near enough to offset the carrying expenses. There would also be an increased risk of date-related expirations, damages, loss; and possible increases in taxes on value of inventory.

5 - 7. See Excel Spreadsheet attachment.

8. The advantages and disadvantages of EOQ are contingent upon the available accuracy of costs related to inventory and shipping, and the product being provided. The calculations of EOQ may not always reflect fluctuations in pricing by quantity or the shelf life of product. These factors could heavily throw off this basic method. In cases where storage spaces is nearly non-existent, instead of EOQ, an order system based on sales would be more reliable.

For the average company, with storage space, non-perishable goods and nominal carrying costs; the EOQ system would be an advantage. Savings could occur from bulk order pricing and less order costs. Just keeping up with the knowledge of how much inventory is needed and when to order can benefit the whole service process. Determining where certain products would rate within an EOQ analysis would provide optimal use of time, resources, and money. By performing at an optimal level in the inventory process, quality of service to the customer would also be a positive by-product.