Question

Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of \(8 per order, and carrying costs of \)1.60 per unit.

b. How many orders will be placed during the year?

Short answer

The number of orders placed is 70 orders.

Step-by-step solution

Information available

Projected sales = 49,000 units

Economic order quantity= 700 units

Calculation of orders placed in a year

The number of orders placed in a year is 70 orders.

$\begin{array}{rcl}\mathrm{Number}\mathrm{of}\mathrm{orders}& =& \frac{\mathrm{Projected}\mathrm{sales}}{\mathrm{EOQ}}\\ & =& \frac{49,000\mathrm{units}}{700\mathrm{units}}\\ & =& 70\mathrm{orders}\end{array}$