What is the economic order quantity

Reference no: EM132982348

Question: ABC is a small chain of stores catering to the do-it-yourself market with good-quality, well-priced tools for home repairs. ABC's sales are relatively stable at $1,250,000 with an average selling price of $50 and average cost of $11.50. The average cost to place an inventory order is $34 and the storage cost for its inventory is $10 per unit. Average days in inventory is 60. ABC's cost of capital is 12% and its tax rate is 28%.

-If ABC orders 1,000 units per order, what is the total annual after-tax order cost
-What is the after-tax cost of holding a unit of inventory
-What is the economic order quantity (EOQ)

Reference no: EM132982348

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