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.
-Based on the annual total inventory cost values, which offer should Wonderful take?
A) $3.00 per bottle for 245 units
B) $3.00 per bottle for 299 units
C) $2.50 per bottle for 245 units
D) $2.50 per bottle for 300 units
E) Do not have enough information to answer the question
Correct Answer:
Verified
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