How does the current policy compare with the optimal policy

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New England Charm, Inc. specializes in selling scented candles. The company has established a policy of reordering inventory every 30 days. A recently employed MBA has considered New England's inventory problem from the EOQ model viewpoint. If the following constitute the relevant data, how does the current policy compare with the optimal policy?

Ordering cost = $10 per order

Carrying cost = 20% of purchase price

Purchase price = $10 per unit

Total sales for year = 1,000 units

Safety stock = 0

Please show work step by step.

Reference no: EM13949989

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