Problem:
Diagnostic Supplies has expected sales of 180,500 units per year, a carrying cost of $4 per unit, and an ordering cost of $10 per order.
Required:
Question 1: What is the economic order quantity?
Question 2: What is average inventory?
Question 3: What is the total carrying cost?
Question 4: What will the new average inventory be?
Question 5: What will the new total carrying cost be?
Note: Please explain comprehensively and give step by step solution.