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Determine the total ordering and carrying costs

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Question - George Company buys 500 boxes of items X-100 every two months. Order costs are P380 per order; carrying costs are P1 per unit and vary directly with inventory investment. Currently, the company purchases the item for P5 each.

Required -

1. Determine the total ordering and carrying costs under current policy.

2. Determine the economic order quantity and the related ordering and carrying costs.

3. What is the order optimal size if the supplier offers a 5% discount for orders of 3,000 units?

Reference no: EM132524866

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