TeeMeUp,an online retailer of t-shirts,orders 80,000 t-shirts per year from its manufacturer.Ready will order t-shirts 12 times over the next year.TeeMeUp receives the same number of t-shirts each time it orders.The carrying cost is $0.10 per shirt per year.The order cost is $500 per order.What is the annual ordering cost of the t-shirt inventory (rounded to the nearest dollar)?

Question

Quizplus · Accepted Answer

To find the annual ordering cost, we need to calculate the total number of orders that TeeMeUp will place over the course of a year and multiply that by the cost per order.

We know that TeeMeUp orders 80,000 t-shirts per year and will order 12 times over the next year. Therefore, they will order 80,000/12 = 6,667 t-shirts per order.

To calculate the number of orders, we divide the annual demand by the order quantity:

80,000/6,667 = 12

So TeeMeUp will place 12 orders over the course of a year.

The ordering cost per order is $500, so the total annual ordering cost is:

12 x $500 = $6,000

Therefore, the best choice is B, with an annual ordering cost of $6,000.

TeeMeUp,an Online Retailer of T-Shirts,orders 80,000 T-Shirts Per Year from Its