Question: Exercise 20.6 (Algorithmic) Ordering and Carrying Costs Ottis, Inc., uses 693,360 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 693,360 plastic housing units each year in its production of paper shredders. The cost of placing an order is $30. The cost of holding one unit of inventory for one year is $19. Currently, Ottis places 162 orders of 4,280 plastic housing units per year.

Required:

1. Compute the annual ordering cost.

2. Compute the annual carrying cost.

3. Compute the cost of Ottis's current inventory policy.

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