The following inventory data have been established for the Cotton Tops Inc.
(1) Annual sales are 500,000 units.
(2) The purchase price per unit is $2.50
(3) Carrying cost is 6% percent of the purchase price of goods.
(4) Cost per order placed is $15.
(5) Desired safety stock is 30 days supply.
Use this data to compute:
(a) EOQ - 3 pts
(b) Average Inventory - 2 pts
(c) Maximum Inventory - 1 pt
(d) Optimal number of orders per year - 1 pts
(e) Total inventory cost - 3 pts