The Campus Bookstore Sells 4,000 Sets of Graduation Regalia Each

Multiple Choice

The campus bookstore sells 4,000 sets of graduation regalia each year. Placing an order from their supplier costs $25 regardless of order quantity, so they usually place a large order (a half year's supply) at a time. It costs $5 per year to hold a cap and gown in inventory, primarily insurance costs for the highly flammable material. What is their optimal order quantity?

A) 150
B) 200
C) 1,000
D) 2,000