FOUND.OF FINANCIAL MANAGEMENT-ACCESS
FOUND.OF FINANCIAL MANAGEMENT-ACCESS
17th Edition
ISBN: 9781260519969
Author: BLOCK
Publisher: MCG
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Chapter 7, Problem 15P

Diagnostic Supplies has expected sales of 84,100 units per year, carrying costs of $5 per unit, and an ordering cost of $10 per order.

a. What is the economic order quantity?

b. What is the average inventory? What is the total carrying cost?

c. Assume an additional 80 units of inventory will be required as safety stock. What will the new average inventory be? What will the new total carrying cost be?

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