Annual Demand for a Product Is 40,000 Units

Multiple Choice

Annual demand for a product is 40,000 units.The product is used at a constant rate over the 365 days the company is open every year.The annual holding cost for the product is estimated to be $2.50 per unit and the cost of placing each order is $125.00.If the company orders according to the economic order quantity (EOQ) formula,then its average inventory level for this product is

A) 20,000 units.
B) 10,000 units.
C) 2,500 units.
D) 1,000 units.