Exhibit Palmer Pens Assume That Palmer Executive Pens Uses 1,440,000 Gallons of Ink

Multiple Choice

Exhibit Palmer Pens
Assume that Palmer Executive Pens uses 1,440,000 gallons of ink each year.Further, assume that Palmer can order the ink at a cost of $2 per gallon plus fixed ordering costs of $100 per order.The firm's carrying cost is 20 percent of the inventory value, at cost.
-Refer to Exhibit Palmer Pens.What is Palmer's minimum costs of ordering and holding inventory?

A) $6,254
B) $10,733
C) $11,560
D) $13,563
E) $19,825