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Total annual cost of ordering and carrying inventory

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Reference no: EM132708064

Consider the following data for a shop. Annual demand = 10000 units; Unit cost = $25 each;

Carrying charge = 10% per year;

Ordering cost = $20 per order;

If a lot size of 100 units is used to order (i.e., Q = 100), the total annual cost of ordering and carrying inventory is:

  • A. $ 2000
  • B. $ 2125
  • C. $ 1000
  • D. $ 1250

Reference no: EM132708064

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