Figure 8-3 Martin Company Uses 625 Units of a Part

question 22

Multiple Choice

Figure 8-3 Martin Company uses 625 units of a part each year. The cost of placing one order is $8; the cost of carrying one unit in inventory for a year is $4.
-Refer to Figure 8-3. Martin has decided to begin ordering 40 units at a time. What is the average annual carrying cost of Martin's new policy?

• A) $80
• B) $60
• C) $160
• D) $4
• E) $90

---

Definitions:

Firm

A business or company, especially one engaged in a professional service or activity.

Order Getters

Salespeople who actively seek out customers and work to persuade them to purchase the company's products or services.

Product Knowledge

Understanding of a company's products, including features, benefits, and uses, essential for effective sales and marketing.

Substantial Investment

A significant amount of money or resources expended in an endeavor with the expectation of achieving a profit or material result.