Question: Consider the following data for a continuous review inventory system: annual demand: 3000; fixed cost of placing an order: $90; monthly holding cost: $2/per item;

Consider the following data for a continuous review inventory system: annual demand: 3000; fixed cost of placing an order: $90; monthly holding cost: $2/per item; and variable purchasing cost: $7 per item. Not counting the annual variable cost of purchasing, what is optimal the annual ordering and inventory holding cost?

a) $24,600

b) $3,600

c) $6,755

d) $6,235.40

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