A hospital orders its thermometers from a hospital supply firm. The cost per thermometer depends on the order quantity Q, as shown in the file P13_58.xlsx. The annual holding cost is 25% of the...

A hospital orders its thermometers from a hospital supply firm. The cost per thermometer depends on the order quantity Q, as shown in the file P13_58.xlsx. The annual holding cost is 25% of the purchasing cost. Let Q₈₀
be the optimal EOQ order quantity if the cost per thermometer is $0.80, and let Q₇₉
be defined similarly if the cost per thermometer is $0.79.


a. Explain why Q₇₉
will be larger than Q₈₀.


b. Explain why the optimal order quantity must be