Reference no: EM132655877

A company has estimates that 36000 ring binders will be needed next year. the binders have been ordered as needed, a procedure, which has not proved satisfactory. The cost of binder ordered in 100_units lots or more in rupees 1.25 each. The cost department estimates cost of rupees 5.60 to place and process and order, further calculation indicate that it cost about 12% of average inventory cost to carry in the inventory. The purchasing department believe that the particle limit for ordering binders will be maximum of 45 and minimum of an orders a year.

Required:

Question a. A table indicating the most economical order quantity.

Question B. The difference in the most order quantity if the earning cost is 20% of average inventory