Economic order quantity

(EOQ).

Tinnendo, Inc. believes it will sell

4

million zen-zens, an electronic game, this coming year. Note that this figure is for annual sales. The inventory manager plans to order zen-zens

25

times over the next year. The carrying cost is

$0.01

per zen-zen per year. The order cost is

$510

per order. What are the annual carrying cost, the annual ordering cost, and the optimal order quantity for the zen-zens? Verify your answer by calculating the new total inventory cost.

What is the annual carrying cost for the zen-zens?

(Round to the nearest dollar.)