=+10 Captain ple buys 100,000 widgets per year at a cost of £15 per widget for use in its production process. The cost of holding one widget in stock, in terms of interest, security, insurance, storage, etc. is £1.20 per year. The cost of reordering and taking delivery of widgets is £250 regardless of the size of the order.

Required a Calculate the economic order quantity and the total cost of inventory manage-
ment on the assumption that usage is predictable and even through the year and ordering and delivery of widgets is simultaneous.