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Green Thumb Garden Centers sells 240,000 bags of lawn fertilizer annually. The optimal safety stock (which is on hand initially) is 1,200 bags. Each bag costs Green Thumb $4, inventory carrying costs are 20 percent, and the cost of placing an order with its supplier is $25.

Task:

Question 1: What is the economic ordering quantity?

Question 2: What is the total inventory cost at the EOQ level?

Note: Please show the work not just the answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91172791

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