Question: Fisk Corporation is trying to improve its inventory control system and has installed an on-line computer at its retail stores. Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 per unit.

1. What is the economic ordering quantity?
2. How many orders will be placed during the year?
   Orders placed = Total usage/units per order
   Orders placed = 75,000/1000 = 75
3. What will the average inventory be?
4. What is the total cost of ordering and carrying inventory?

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