Company A provides an integrated genetic test. Demand for the test is relatively stable at an average of 2000 tests per year.

Company A can purchase the testing kits from the supplier in a batch. Each test requires an advanced testing kit that can be purchased from a sole supolier at a wholesale price of $100 each. The supplier charges a fixed ordering cost (including shipping) of $80 for each batch Company A orders, regardless of the size of the batch. As soon as the batch is delivered, Company A pays the supplier out of is an operational cash account. which generates interest for Company A on a compound annual grown rate (CAGR) of 2%. lest kits are very small parts that do not require any physical resources (e.g., extra space or climate control) to hold. Company A has made an inventory decision of ordering 400 units in a batch each time it orders from the supplier. Which of the following IS NOT true:

A. This is the ECQ solution

B. The solution will impose an annual inventory, holding costs that is equal to the annual total set up cost

C. Company eight is expected to order five times a year.

D. The solution will impose an annual inventory, holding cost that is much higher than the annual total set up cost.