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Burgoon Uses an Economic Order Quantity Model and Has Determined

Question 2

Multiple Choice

Burgoon uses an economic order quantity model and has determined an optimal order size of 500 units. Annual demand is 10,000 units, ordering costs are $50 per order, and holding costs are $4 per unit. The company's annual ordering and holding costs total:


A) $2,000.
B) $3,000.
C) $21,000.
D) $41,000.
E) none of the other answers are correct.

Correct Answer:

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