Question: Economic order quantity (Appendix 7.2). The Sun Valley Foundry regularly uses 10,000 axles per year. It can purchase axles for $100 each. Ordering costs are

Economic order quantity (Appendix 7.2). The Sun Valley Foundry regularly uses 10,000 axles per year. It can purchase axles for $100 each. Ordering costs are $10 per order, and the holding costs of items in inventory are 20 percent of cost per year. Prepare an analysis for management that answers the following question:

What are the economic order quantity and annual ordering costs?

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