Managing Supply Chain and Operations 1st Edition by Thomas Foster ,Scott Sampson,Cynthia Wallin,Scott Webb

Exercise 5

A company incurs an ordering cost of $90 each time it places an order, regardless of the order size. The item's cost is $25, and the annual carrying charge for the item is 20%. If annual demand for this item is 2500 and the company's order quantity (Q) is 300, calculate its total annualized cost of inventory.