The Materials Manager for a Billiard Ball Maker Must Periodically

The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be theaverage daily total inventory costs, EXCLUDING the cost of the resin?

A) $5
B) $10
C) $20
D) $25
E) $40

Correct Answer:

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