ABC, Inc. manufactures 500 drones per month. The company purchases composite materials from a supplier at the cost of $200 per unit. Four units of composite materials are used in each drone. The company’s inventory carrying cost is estimated to be 15% of the cost and the ordering cost is 150 per order.
a. Calculate the EOQ
b. What is the number of orders per year?
c. Compute the average annual ordering cost.
d. Compute the average inventory.
e. Compute the average annual carrying cost?
f. Compute the total cost