c Order Quantity should be 1183.216 units.Re-Order Level should be 8158.392 units.Total Inventory COST should be Rs. 20,216.84.Variation in Total Inventory cost if price per unit is changed to 5 should be 21865.16Explanation:In the given question,the following information has been PROVIDED,Annual demand of item(A) = 8400 unitsPrice per unit = Rs. 2.4Ordering cost per order (O)= Rs.4Carrying/Storage Cost (C) = 2% of Price per unitInterest Rate = 10% p.aLead Period/Lead time = 0.5 months1) Calculation of ECONOMIC Order Quantity (EOQ): EOQ =         =            = 1183.216 units 2) Calculation of Re-Order Level(ROL):         ROL= Buffer stock level + [ Normal/Average Usage + Normal Lead time]Now,In order to calculate ROL we will have to calculate Buffer stock level first.Since there is no information about the Maximum or Minimum Stock level therefore we will take Average Stock level as 8400 units.Now,Average Stock level = Buffer stock level +                                         + Buffer stock level                                                                               Buffer stock level                         Buffer stock level = 7808.392Now,ROL =        = 8158.392 units          3) Calculation of Total Inventory Cost :       Total Inventory Cost = Total PURCHASE cost + Total Relevant cost                                            = Total Purchase cost +                                            =                                                                    = 20160 + 56.794                                             = 20216.794Part 2:       Calculation of Variation in Total Inventory cost if Price per unit       changes to Rs.5        EOQ =          =820.3469Buffer stock level = Average stock level - EOQ                                   =     Buffer stock level     = 3379.65ROL =          =  3729.65Total Inventory cost =                                    = 42082Therefore,Variation in Total Inventory Cost =                                                                          = 21865.16