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ORDERING COST, CARRYING COST, AND TOTAL INVENTORY-RELATED COST
Aravan Company purchases 4,000 units of Product Beta each year in lots of 400 units per order. The cost of placing one order is $20, and the cost of carrying one unit of prod- uct in inventory for a year is $4.
Required:
1. How many orders for Product Beta does Aravan place per year?
2. What is the total ordering cost of Beta per year?
3. What is the total carrying cost of Beta per year?
4. What is the total cost of Aravan's inventory policy for Beta per year?
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