How many orders will be made per year

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Reference no: EM13952289

The Miller Brewing. has developed a new type of Beer. The local distributor expects to increase his sales by 20% over the past year due to this new development. Last year's sales were $50,000 at a selling price of $100 per unit. A safety stock of 23 units has eliminated stock outs. The manager would like to cut costs as much as possible and comes to you for advice.

Warehouse space $2.50/unit

Material Handling Expense $1.50/unit

Insurance Premium $1.00/unit

Total ordering cost $100.00/per order

What is the economic order quantity?

How many orders will be made per year?

What is the total cost of this inventory decision?

Reference no: EM13952289

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