The High-Rise Building Company (HRBC)uses 400,000 Tons of Stone Per

question 35

Multiple Choice

The High-Rise Building Company (HRBC) uses 400,000 tons of stone per year. The carrying costs are $100/ton. The cost per order is $500. Calculate the optimal carrying costs. (Assume a linear usage rate and that HRBC runs its inventory down close to zero as the replenishment order arrives.)

• A)$200,000
• B)$100,000
• C)$75,000
• D)$50,000

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