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What would be the total ordering and carrying costs for year

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The Milling Corp. has developed a new type of widget. The local distributor expects to increase their sales by 31% over the next year due to this new development. Last year's sales were $61,000 at a selling price of $122 per unit. The manager would like to cut costs as much as possible and comes to you for advice on inventory and ordering based on the increase in sales. They also supply you with the following information. Every time they place an order they estimate the cost to be $210 and the cost of storage, insurance and etc is $16 per unit.

Problem 1. How many units should they order each time they place an order?

Problem 2. What would be their average # of units in their inventory?

Problem 3. How many orders will be made per year?

Problem 4. What would be the total ordering and carrying costs for the year?

Reference no: EM132825579

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