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Calculate the holding costs and ordering costs per annum

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Question - Evan has problems with their stock levels of paper. Currently, they are using 50,000 reams of paper per year. It is costing Evan $300 to place each order and $1.2 to hold each unit per year. Evan is wondering if there is a more economical way to manage its inventory.

Required -

a. Calculate the economic order quality.

b. Calculate the holding costs and ordering costs per annum.

c. How does this compare with their current order quantity of 2000 units per order?

Reference no: EM132703834

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