Find what is the annual inventory carrying costs

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Problem 1: Based on an Economic Ordering Quantity analysis (assuming a constant demand), the optimal order quantity is 2,500. The entity desires a safety stock of 500 units. A 5-day lead time is needed for delivery. Annual inventory carrying costs equal 25% of the average inventory level. The company pays $4 per unit to buy the product, which it sells for $8. The company pays $150 to place a detailed order, and the monthly demand for the product is 4,000 units. What is the annual inventory carrying costs?

Reference no: EM132893376

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