Discount-mart (see problem 16.8), as part of its new lean program, has signed a long-term contract with specialty lighting and will place orders electronically for its halogen lamps. ordering costs will drop to $.50 per order, but discount mart also reassessed its carrying costs and raised them to $20 per lamp.

a) what is the new economic order quantity?
b) how many orders will now be placed?
c) what is the total annual cost of managing the inventory with this policy?

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?