ABC Co. sells widgets and expects annual demand of 3.4 million units. The cost of making an order is £49.71 and
the cost of holding one unit for one year is £0.50.
What is the total ordering cost per year?
Revaile Co. has annual transactions of £30 million. The fixed cost of converting securities into cash is £500 per conversion. The annual opportunity cost of funds is 6%.
What is the optimal deposit size?