If the order quantity per order is 2,000 units,annual demand is 10,000,and cost per order is $50,then which of the following statements is true?
A)There are 15 orders in the year.
B)The average inventory is 1,000 units.
C)The holding cost per unit is $2.50.
D)The total annual holding costs are $25,000 (= $2.50 * 10000).

Question

Quizplus · Accepted Answer

The average inventory is calculated as half the order quantity, which in this case is 2,000 units / 2 = 1,000 units.

If the Order Quantity Per Order Is 2,000 Units,annual Demand