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.
What is Inventory Carrying Cost? Inventory carrying cost is a ratio which describes the relationship between the cost-of-owning-inventory-per-year and the inventory value. For example, if your inventory carrying cost is 25% and your annual average inventory is $1M, then your annual cost of owning inventory is $250K.The rule of thumb for inventory carrying cost is between 20% and 30%. Inventory carrying cost is different for every business.It is not wise to use the industry average as your inventory carrying cost. Inventory carrying cost (Eq. 1) should be calculated for each business.he rule of thumb for inventory carrying cost is between 20% and 30%. Inventory carrying cost is different for every business. It is not wise to use the industry average as your inventory carrying cost. Inventory carrying cost (Eq. 1) should be calculated for each business.