Economic Order Quantity Ottis, Inc., uses 585,225 plastic housing units each year in its production of paper shredders. The cost of placing an order is $42. The cost of holding one unit of inventory for one year is $21. Currently, Ottis places 153 orders of 3,825 plastic housing units per year. Required: 1. Compute the economic order quantity. fill in the blank 1 units 2. Compute the ordering, carrying, and total costs for the EOQ. Ordering cost $fill in the blank 2 Carrying cost fill in the blank 3 Total cost $fill in the blank 4 3. How much money does using the EOQ policy save the company over the policy of purchasing 3,825 plastic housing units per order? Round your answer to the nearest dollar $fill in the blank
Economic Order Quantity Ottis, Inc., uses 585,225 plastic housing units each year in its production of paper shredders. The cost of placing an order is $42. The cost of holding one unit of inventory for one year is $21. Currently, Ottis places 153 orders of 3,825 plastic housing units per year. Required: 1. Compute the economic order quantity. fill in the blank 1 units 2. Compute the ordering, carrying, and total costs for the EOQ. Ordering cost $fill in the blank 2 Carrying cost fill in the blank 3 Total cost $fill in the blank 4 3. How much money does using the EOQ policy save the company over the policy of purchasing 3,825 plastic housing units per order? Round your answer to the nearest dollar $fill in the blank
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Economic Order Quantity
Ottis, Inc., uses 585,225 plastic housing units each year in its production of paper shredders. The cost of placing an order is $42. The cost of holding one unit of inventory for one year is $21. Currently, Ottis places 153 orders of 3,825 plastic housing units per year.
Required:
1. Compute the economic order quantity.
fill in the blank 1 units
2. Compute the ordering, carrying, and total costs for the EOQ.
| Ordering cost | $fill in the blank 2 |
| Carrying cost | fill in the blank 3 |
| Total cost | $fill in the blank 4 |
3. How much money does using the EOQ policy save the company over the policy of purchasing 3,825 plastic housing units per order? Round your answer to the nearest dollar
$fill in the blank 5
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