Economic order quantity micro-encapsulator corp mec expects, Financial Management

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Economic order quantity micro-encapsulator corp mec expects

Economic Order Quantity. Micro-Encapsulator Corp. (MEC) expects to sell 7,200 miniature home encapsulators this year. The cost of placing an order from its supplier is $250. Each unit costs $50 and carrying costs are 20% of the purchase price. (Please show workings).

a. What is the economic order quantity?

b. What are the total costs – order costs plus carrying costs – of inventory over the course of the year? (Please show workings).

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