The Sterling Corp. has developed a new type of widget. The local distributor expects to increase
his sales by 23% over the past year due to this new development. Last year's sales were
$176,000 at a selling price of $103 per unit. A safety stock of 21 units has eliminated
stockouts. The manager would like to cut costs as much as possible and comes to you for advice.
Warehouse Space $1.62 per unit
Materials Handling Expense $1.84 per unit
Insurance Premium $0.86 per unit
Total Ordering Cost $88 per order
What is the carrying cost per unit?			$
How many units will be sold next year?			Units
What is the economic order quantity next year?		Units
What is the amount of average inventory?		Units
How many orders will be made per year?		Orders
What is the total cost of this inventory decision?