Introduction to Materials Management 8th Edition by Steve Chapman ,Tony Arnold ,Ann Gatewood ,Lloyd Clive

Exercise 2

If the order quantity is increased to 1000 units, recalculate problems a to e and compare the results.
problems
An SKU costing $10 is ordered in quantities of 500 units, annual demand is 5200 units, carrying costs are 20%, and the cost of placing an order is $50. Calculate the following:
a. Average inventory.
b. Number of orders placed per year.
c. Annual inventory-carrying cost.
d. Annual ordering cost.
e. Annual total cost.