Packed with plump morsels of Washington state farm apples and our trademark spice blend, this juicy sausage is so tasty, it could almost be called addictive (in a healthy way, of course). Try it grilled with a Dijon, garlic and honey glaze.
Its cost per order is $400 and its carrying cost unit is $10 per unit per annum. The company has a demand for 20,000 units per year. Calculate the order size, total orders required during a year, total carrying cost and total ordering cost for the year.
The cost of carrying inventory can be calculated by multiplying the cost of carrying a unit of inventory by the average number of units carried, usually for a year. If inventory is used at a steady pace, and restocked when empty, then the average number of units held would be the order size divided by 2.e can determine the ordering cost by calculating the number of orders in a year, and multiply this by the cost of each order. To determine the number of orders we simply divide the total demand (D) of units per year by Q, the size of each inventory order. D=Total demand (units). Q=Inventory order size (quantity).