Determining the economic ordering quanity


Problem:

Fisk corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. FIsk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 per unit.

Required:

Question 1: What is the economic ordering quanity?

Question 2: How many orders will be placed during the year?

Question 3: What will the average inventory be?

Question 4: What is trhe total cost of ordering and carrying inventory?

Note: Please answer in proper manner and show all computations

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Accounting Basics: Determining the economic ordering quanity
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