For a Certain Group of Items the Cost of Carrying

Multiple Choice

For a certain group of items the cost of carrying inventory and the cost of placing orders is not exactly known but is about the same for all the items. The company has calculated K = 20 for these items. If one item has an annual demand (A) = $10,000 the NEW order quantity should be:

A) $2,000
B) $10,000
C) $20,000
D) $50,000
E) none of the above