Diagnostic Supplies has expected sales of 175,000 units per
year, a carrying cost of $5 per unit, and an ordering cost of $7
per order.
(a) | What is the economic order quantity? |
Economic order quantity |
units |
(b-1) | What is average inventory? |
Average inventory |
units |
(b-2) | What is the total carrying cost? (Omit the “$” sign in your response.) |
Total carrying cost |
$ |
Assume an additional 70 units of inventory will be required as safety stock. |
(c-1) | What will the new average inventory be? |
Average inventory |
units |
(c-2) | What will the new total carrying cost be? (Omit the “$” sign in your response.) |
Total carrying cost |
$ |