Problem:
Sales are estimated to be 4,500 units annually at $3,000 each.
The cost of each unit for Taylor Incorporated is $1,200.
Inventory carrying cost is 5% of the cost value of the device.
Order placement cost is $60.
1. Identify the number of units to purchase.
2. Identify the number of orders per year that must be made.
(In other words, what are the inventory reorder points and the quantities per order?)