Suppose that instead of ordering the amount Q specified by the EOQ formula, we use the order quantity 0.8Q. Show that the sum of the annual ordering cost and the annual holding cost increases by 2.5%....

Suppose that instead of ordering the amount Q specified by the EOQ formula, we use the order quantity 0.8Q. Show that the sum of the annual ordering cost and the annual holding cost increases by 2.5%.

 In terms of K, D, and h, what is the average length of time that an item spends in inventory before being used to meet demand? Explain how this result can be used to characterize a fast-moving or slow-moving item.