Assume That the Order Quantity Is 1000 Units,and the Holding

Multiple Choice

Assume that the order quantity is 1000 units,and the holding costs are $5 a unit per year.In this case,______.

A) the average inventory level is 500 units,and the total annual holding costs are $2,500
B) the average inventory level is 1,000 units,and the total annual holding costs are $5,000
C) the average inventory level is 0 units,and the total annual holding costs are $5
D) the average inventory level is 500 units,and the total annual holding costs are $5,000