What is the economic ordering quantity-average inventory

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Reference no: EM131503169

Nowlin Pipe & Steel has projected sales of 48,400 pipes this year, an ordering cost of $3 per order, and carrying costs of $1.50 per pipe.

a. What is the economic ordering quantity?

b. How many orders will be placed during the year?

c. What will the average inventory be?

Diagnostic Supplies has expected sales of 115,600 units per year, carrying costs of $4 per unit, and an ordering cost of $8 per order.

a. What is the economic ordering quantity?

b-1. What is the average inventory?

b-2. What is the total carrying cost?

Assume an additional 60 units of inventory will be required as safety stock.

c-1. What will the new average inventory be?

c-2. What will the new total carrying cost be?

Reference no: EM131503169

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