Compute the total cost of balfours current inventory policy

Reference no: EM13947749

Balfour Company uses 30,000 subassemblies in production each year. The cost of placing an order is $600. The cost of holding one unit of inventory for one year is $4. Currently, Balfour places 50 orders of 6,000 subassemblies per year.

Required

1. Compute the annual ordering cost.

2. Compute the annual carrying cost.

3. Compute the total cost of Balfour's current inventory policy.

Reference no: EM13947749

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