Nowlin Pipe Steel has projected sales of 72,000 pipes this year, an ordering cost of $6 per order, and carrying costs of $2. 40 per pipe a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be? Solution: Nowlin Pipe and steel Company a.EO0=2SO_2×72006 $864.0 0000=600 units $240 b. 72.000 units/600 units=120 orders C. EoQ/2-600/2=300 units(average inventory) -253 CopyrightC2005 by The McGraw-Hill Companies, IncCopyright © 2005 by The McGraw-Hill Companies, Inc. S-253 7-11. Nowlin Pipe & Steel has projected sales of 72,000 pipes this year, an ordering cost of $6 per order, and carrying costs of $2.40 per pipe. a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be? Solution: Nowlin Pipe and Steel Company 360,000 600 units $2.40 $864,000 $2.40 2 72,000 $6 C 2SO a. EOQ = = =   = = b. 72,000 units/600 units = 120 orders c. EOQ/2 = 600/2 = 300 units (average inventory)