Question: Consider a retail store that uses the EOQ model to manage its inventory of a SKU. The business setting satisfies all EOQ assumptions. The manager

Consider a retail store that uses the EOQ model to manage its inventory of a SKU. The business setting satisfies all EOQ assumptions. The manager correctly finds EOQ=100 units and the annual total (sum of) ordering and cycle inventory holding costs to be $500 at EOQ=100. However, the store's current inventory policy specifies the order quantity of Q=120 units. Which of the following values is the most accurate assessment of the stores current annual total (sum of) ordering and cycle inventory holding costs at Q=120?

ANSWER CHOICES

A- $1200/year

B- $800/year

C- $300/year

D- $550/year

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