Question: Exercise 20.6 (Algorithmic) Ordering and Carrying Costs Ottis, Inc., uses 683,400 plastic housing units each year in its production of paper shredders. The cost of

Exercise 20.6 (Algorithmic) Ordering and Carrying Costs

Ottis, Inc., uses 683,400 plastic housing units each year in its production of paper shredders. The cost of placing an order is $33. The cost of holding one unit of inventory for one year is $12. Currently, Ottis places 170 orders of 4,020 plastic housing units per year.

Required:

1. Compute the annual ordering cost.

2. Compute the annual carrying cost.

3. Compute the cost of Ottiss current inventory policy.

Is this the minimum cost?

- Select your answer -YesNo

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