Milling Corp. has developed a new type of widget. The local distributor expects to increase his sales by 20% over the past year due to this new development. Last year's sales were $50,000 at a selling price of $100 per unit. A safety stock of 23 units has eliminated stockouts. The manager would like to cut costs as much as possible and comes to you for advice.

Warehouse Space - $2.50 per unit Material Handling Expense - $1.50 per unit Insurance Premium - $1.00 per unit Total Ordering Cost - $100.000 / per order

1. What is the economic order quantity? 2. What is the amount of average inventory? 3. How many orders will be made per year? 4. What is the total ordering cost of this inventory decision? 5. What is the total carrying cost of this inventory decision?