Mark Achin Sells 3,600 Electric Motors Each Year

Mark Achin sells 3,600 electric motors each year.The cost of these is $200 each, and demand is constant throughout the year.The cost of placing an order is $40, while the holding cost is $20 per unit per year.There are 360 working days per year and the lead-time is 5 days.If Mark orders 200 units each time he places an order, what would his total ordering cost be for the year?

A) $2,000
B) $2,720
C) $200
D) $720

Correct Answer:

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