You sell 25,000 loaf of bread per year. The carrying cost associated the main ingredient wheat flour is estimated to be $8 per unit (amount used for 1 loaf of bread) per year, and the ordering cost is $10 per order. And assume 1 year is 300 days and lead time is 3 days. Required:
a. What is the EOQ?
b. How much money you will lose if you order 300 units of wheat flour? Calculate the total cost of inventory with EOQ model and with order size is 300. The difference will give you the answer.
c. Calculate the re-order point (assuming no uncertainty)?

Annual Demand (D) = 25000

Carrying Cost (H) = 8

Ordering Costs (S) = 10

Number of working days = 300

Lead Time (Lt) = 3 days

a. EOQ = Sqrt (2*D*S/H)

EOQ = Sqrt (2*25000*10/8)

EOQ = Sqrt (62500)

EOQ = 250

b. Total Cost = (D * S) / EOQ + (EOQ * H) / 2

Total Cost = (25000 * 10) / 250 + (250 * 8) / 2

Total Cost = 1000 + 1000

Total Cost = 2000

Now, we calculate total Cost with order size: of 300

Total Cost = (25000 * 10) / 300 + (300 * 8) / 2

Total Costs = 833.3333 + 1200

Total Cost = 2,033.3333

The amount to lost if we order 300 units of wheat flour is as follows

= 2033.33 - 2000

= $33.33

3. ROP = (D / Number of working days) x Lt

ROP = (25000 / 300) * 3

ROP = 83.3333 * 3

ROP = 249.9999

ROP = 250

Your question asks what kind of actions the people took with the stocks.

The reason why answer choice "C). Insider trading" is the correct answer is because the person is performing actions that can lead to automatic success in the stock market.

Insider trading is getting the knowledge of a business or company before hand and making changes to one's stocks in order to keep making profit. People do insider trading in order to have an advantage with their stocks with information that is confidential. Insider trading is ILLEGAL and will result in time in prison, and will also have criminal fines.

Let me explain insider trading for you in an example. For example, Bob has stocks from Samsung, he found information that Samsung has been having a rough time keeping their business higher than Apple, so he sells his Samsung stocks before the stock value decreases. He would be performing insider trading because he used information from the business in order to sell his stocks before the stock value decreases, and that will cause him to lose money if he doesn't sell it.

In your question, people got the information that the Pizza place was purchased by a nationwide pizza place, which means that the stock will increase its value. Therefore, with the information they got, they bought a stock from the Italian Stallion Pizza Stations before the stock price increases because they know they'll make profit from it, due to the information that they heard on the plane.