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Compute the economic order quantity compute the ordering

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Reference no: EM13573112

Corsair, Inc., uses 40,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is $40. The cost of holding one unit of inventory for one year is $5. Currently, Corsair places eight orders of 5,000 plastic housing units per year.

Required:

1. Compute the economic order quantity.

2. Compute the ordering and carrying costs for the EOQ.

3. How much money does using the EOQ policy save the company over the policy of purchasing 5,000 plastic housing units per order?

Reference no: EM13573112

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