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If a Company Carries Safety Stock and Its Annual Carrying

Question 122

Multiple Choice

If a company carries safety stock and its annual carrying costs per unit are $0.30,what formula yields the total annual carrying costs?


A) $0.30 ´ [(EOQ/2) + Safety stock) ]
B) $0.30 ´ (EOQ + Safety stock)
C) $0.30 ´ [(EOQ ´ 2) + Safety stock) ]
D) $0.30 ´ (EOQ - Safety stock)

Correct Answer:

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