Determine annual cost of ordering and carrying cloth

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Reference no: EM1374672

Q. A service garage uses 120 boxes of cleaning cloths per year. Boxes cost $6 each. Ordering cost is $3 and holding cost is 10 percent of purchase cost per unit on annual basis.

Determine:

a. Economic Order Quantity?

b. Total cost of carry cleaning cloths? (Excluding purchase price)

c. Average Inventory?

d. annual cost of ordering and carrying cloth?

e. If supplier offered a price of $5 per box and if all 120 boxes were ordered at same time, should garage take order?

Reference no: EM1374672

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