How much is the total carrying cost and total ordering cost

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Barter corporation has been buying Product BB in lots of 4 800 units. This number is good for four months supply. The cost per unit is P 300 and the cost per order is P 600. The annual carrying cost is 25%.

Problem 1: Using the formula method, what is the economic order quantity?

Problem 2: Use the tabular method, assuming the following order sizes: 100, 200, 240, 480, 720, 960, 1440, 2880

  1. How much is the total carrying cost and total ordering cost at EOQ point?
  2. How many times should the company place the order using the most economical order?
  3. What is the frequency, in days, of making the order assuming a 365-calenday days in a year?

Reference no: EM132735054

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