If the Order Quantity Per Order Is 2,000 Units,annual Demand

question 6

Multiple Choice

If the order quantity per order is 2,000 units,annual demand is 10,000,and cost per order is $50,then which of the following statements is true?

• A)There are 15 orders in the year.
• B)The average inventory is 1,000 units.
• C)The holding cost per unit is $2.50.
• D)The total annual holding costs are $25,000 (= $2.50 * 10000).