10.4. Items are purchased from a vendor at a cost of $20 each, and the forecast for the next year’s demand is 1000 units. It costs $5 every time an order is placed for more units and the carrying cost is $4 per unit per year.

a. What quantity should be ordered each time?

b. What is the total ordering cost for a year?

c. What is the total carrying cost for a year?

d. How do the costs of carrying inventory compare with the costs of ordering?