This problem is similar to one you will face on the first exam.

We have a product that costs $

$3$

$0$

$$each and we need

$4$

$0$

$0$

$$of them each month. The time it takes our staff to work with the supplier each time we order costs approximately $

$4$

$0$

$0$

$.$

$$Transportation costs are $

$6$

$0$

$0$

$$per order and receiving

$/$

inspection costs for each order is $

$1$

$0$

$0$

$.$

$$We$\text{'}$ve estimated the annual cost of keeping any items in inventory as around

$2$

$5$

$\%$

$$of their initial purchase cost.