The economic order quantity model

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1. ABC Company sells 2,638 chairs a year at an average price per chair of $157. The carrying cost per unit is $33.64. The company orders 441 chairs at a time and has a fixed order cost of $53 per order. The chairs are sold out before they are restocked. What are the total carrying costs?

2. ABC Company sells 2,234 chairs a year at an average price per chair of $199. The carrying cost per unit is $24.78. The company orders 368 chairs at a time and has a fixed order cost of $131 per order. The chairs are sold out before they are restocked. How many orders will company place if it follows the economic order quantity model?

Reference no: EM131304733

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