Question: Ottis Inc uses 632,025 plastic casing units each year in its production of paper shredders.The cost to place an order is $36.The cost of holding

Ottis Inc uses 632,025 plastic casing units each year in its production of paper shredders. The cost to place an order is $36. The cost of holding one unit of inventory for one year is $18. Ottis currently places 159 orders for 3,975 plastic homes per year.

1. Calculate the economic order quantity.

2. Calculate the ordering, transportation, and total costs for the EOQ.

3. How much money does the EOQ policy save the company compared to the policy of purchasing 3,975 units of plastic housing per order?

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