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A trucking company maintains an inventory of trucks that varies monthly. The ending inventory levels of trucks during the first 8 months of the year
A trucking company maintains an inventory of trucks that varies monthly. The ending inventory levels of trucks during the first months of the yearJanuary to August were respectively. The monthly inventory holding cost is proportional to the monthly ending inventory. Trucks incur the following costs
each truck costs the company $
interest rate on the cost of capital is per annum annually
each truck incurs a storage cost of per annum of the truck cost.
each truck incurs a liability insurance cost of per annum of the truck cost.
The carrying cost is the total of all costs capital storage, and insurance
Answer the following questions:
what is the monthly carrying cost per truck?
What is the total carrying cost incurred by the company over the months January to August
What is the total annual carrying cost?
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