Problem:
The Trektronics store begins each month with 740 phasers in stock. This stock is depleted each month and reordered. The carrying cost per phaser is $26 per year and the fixed order cost is $340. (Enter your answer as directed, but do not round intermediate calculations.)
Required:
Question 1: What is the total carrying cost?
Question 2: What is the restocking cost?
Question 3: Calculate the economic order quantity.
Question 4: Calculate the optimal number of orders per year.
Question 5: Should the company increase or decrease its order size? Could you explain how to find these?
Note: Show supporting computations in good form.