The Wonderful Hair Salon buys lots of shampoos. Wonderful follows the exponential-smoothing forecasting method, and based on their forecast calculations, annual demand is 750 units. Wonderful normally pays $3.00 per shampoo bottle when ordering from its supplier. Each order that is placed with the supplier costs $18 to process. Wonderful's holding cost for shampoos is 15% of the cost of the shampoo bottle per year.
-The supplier tells Wonderful's purchasing agent that the supplier can sell each shampoo bottle for $2.50 each if Wonderful buys a minimum of 300 units at a time. What will be the total annual inventory cost with the new supplier offer?
A) $2,360
B) $101.25
C) $2,375
D) $1,950
E) $2,000
Correct Answer:
Verified
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