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Geron Company manufactures a line of deluxe office fixtures. The annual demand for its miniature oak file is estimated to be 5,000 units. The annual cost of carrying one unit in inventory is P10, and the cost to initiate a production run is P1,000. There are no miniature oak files on hand, and Geron has scheduled four equal production runs of the miniature oak file for the coming year, the first of which is to be run immediately. Geron has 250 business days per year. Assume that sales occur uniformly throughout the year and that production is instantaneous. Problem 1: If Geron does not maintain a safety stock, the estimated total carrying costs for the office fixtures for the coming year based on their current schedule is
Group of answer choices
Option 1: P5,000
Option 2: P4,000
Option 3: P6,250
Option 4: P10,250
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