Ordering and carrying costs

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Reference no: EM131993686

Ordering and Carrying Costs

Ottis, Inc., uses 582,010 plastic housing units each year in its production of paper shredders. The cost of placing an order is $28. The cost of holding one unit of inventory for one year is $20. Currently, Ottis places 143 orders of 4,070 plastic housing units per year.

Required:

1. Compute the annual ordering cost. $

2. Compute the annual carrying cost. $

3. Compute the cost of Ottis’s current inventory policy. $

Reference no: EM131993686

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