Order quantity that minimizes the total annual cost

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The manager of a local Teen clothing store the demand in the near future for its jeans to be 154 per month. The store purchases a pair of jeans for $80, computes the cost of carrying one year as 10% of its purchase price, and estimates the cost associated with placing an order to be $30. It can be assumed that the entire purchase order will be received four working days after an order is placed and that shortages are not permitted.

Determine the order quantity that minimizes the total annual cost.

a) Greater than or equal to 6 and less than or equal to 10

b) Greater than or equal to 29 and less than or equal to 33

c) Greater than or equal to 265 and less than or equal to 269

d) None of the above

Reference no: EM131748639

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