3) Andre Candess manages an office supply store. One product in the store is computer paper.
Andre knows that 10,000 boxes
will be sold this year at a constant rate throughout the year.
There are 250 working days per year and the lead-time is 3
days. The cost of placing an order is
$30, while the holding cost is $15 per box per year. If Andre orders 500 boxes each
time he orders
from his supplier, what would his total annual inventory cost be (holding cost plus ordering
cost)?
A)
$3,000
B) $3,075
C) $3,750
D) $4,350
E) none of the above