analytics

Wear A Mask (WAM) faces demand for one of its SKUs at a constant rate of 20,000 units per year. It costs $27 to process an order to replenish inventory and $4.00 per unit per year to carry the item in inventory. Inventory is received 8 working days after an order is placed. No backordering is allowed. Assume 275 working days a year.

If WAM decides to order the economic order quantity, what is the total annual inventory cost (annual ordering cost and annual holding cost) is $_______________ (enter response round to 2 decimal places).