Overland Has a Part with a Unit Cost of $40

question 52

Multiple Choice

Overland has a part with a unit cost of $40. It costs $52 to place, process and receive an order. The carrying cost of the inventory is approximately 20% of the part's dollar value per year. The firm uses 2,000 of the parts each year. What order quantity minimizes total inventory cost?

• A)93
• B)127
• C)161
• D)205

---

Definitions:

Tooth

A hard, calcified structure found in the jaws of many vertebrates, used for chewing food.

Dentin

Dentin is a hard, dense tissue forming the bulk of a tooth beneath the enamel and above the pulp.

Pylorus

The region of the stomach that connects to the duodenum of the small intestine, acting as a valve to control food passage.

Stomach

An organ in the digestive system that breaks down food using acids and enzymes, preparing it for further digestion in the intestines.