Determine annual cost of ordering and carrying cloth

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Reference no: EM1374672

Q. A service garage uses 120 boxes of cleaning cloths per year. Boxes cost $6 each. Ordering cost is $3 and holding cost is 10 percent of purchase cost per unit on annual basis.


a. Economic Order Quantity?

b. Total cost of carry cleaning cloths? (Excluding purchase price)

c. Average Inventory?

d. annual cost of ordering and carrying cloth?

e. If supplier offered a price of $5 per box and if all 120 boxes were ordered at same time, should garage take order?



Reference no: EM1374672


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