What Is the Annual Ordering Cost (Based on the Rounded

Multiple Choice

What is the annual ordering cost (based on the rounded up number of orders) ?

A) $150
B) $175
C) $200
D) $250
Cooper Company has average demand of 50 units per day. Lead time from the supplier averages 20 days. The combined standard deviation of demand during lead time is 20 units. The item costs $75 and inventory carrying cost is 24%. Answers to the next two questions are based on this information.
1 standard deviation covers 84.13%
1) 04 standard deviations covers 85%
1) 28 standard deviations covers 90%
1) 65 standard deviations covers 95%
1) 96 standard deviations covers 97.5%
2 standard deviations covers 97.72%
2) 33 standard deviations covers 99%
3 standard deviations covers 99.86%
6 standard deviations covers 99.99966%