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A Boston branch of the BabyStuff, a fictional U.S. manufacturer of children's apparel, is striving to improve its inventory management. The store estimates that its
A Boston branch of the BabyStuff, a fictional U.S. manufacturer of children's apparel, is striving to improve its inventory management. The store estimates that its weekly sales are 1,600 units. Each order costs a fixed administrative expense of $4,000. Assume that there is no seasonality and the lead time is zero. Holding costs are 10% of average inventory cost per year. On average, each unit of apparel costs the store $5. What is BabyStuff's Boston store's average annual inventory holding cost if it chooses to order 4 times a year?
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