Question: Demand for an item is 50 units a month. Unit cost is $25, re-order cost is $25, holding cost is 25% of value a year,

Demand for an item is 50 units a month. Unit cost is $25, re-order cost is $25, holding cost is 25% of value a year, shortage cost for back-orders is 40% of value a year. How often the item is out of stock? Choose the nearest answer.

a) 42% of the time

b) 38% of the time

c) 44% of the time

d) 40% of the time

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