Problem:
Gaming Inc believes it will sell 4 million games this coming year.This figue is for annual sales. The inventory manager plans to games 25 times over the next year. The carrying cost is $0.01 per game per year. The order cost is $532 per order. It turns out the marketing manager has underestimated the game's market. The games are a smash, and current estimates are that the company wills sell 8 million of them per year.
Required:
Question: Find the economic order quantity and verify that is the correct order quantity by finding the new carrying cost and new ordering cost.
Note: Show supporting computations in good form.