Estimation of total ordering cost

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Reference no: EM13104696

Mark Achin sells 3,600 electric motors each year. The cost of these is $200 each, and demand is constant throughout the year. The cost of placing an order is $40, while the holding cost is $20 per unit per year. There are 360 working days per year and the lead-time is 5 days. If Mark orders 200 units each time he places an order, what would his total ordering cost be for the year?

		A) $2,000
		B) $2,720
		C) $200
		D) $720
		E) None of the above

Reference no: EM13104696

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