Fiber Technology, Inc., manufactures glass fibers used in the communications industry. The company's materials and parts manager is currently revising the inventory policy for XL-20, one of the chemicals used in the production process. The chemical is purchased in 10-pound canisters for $106 each. The firm uses 6,000 canisters per year. The controller estimates that it costs $161 to place and receive a typical order of XL-20. The annual cost of storing XL-20 is $5.10 per canister.

1. Prepare a table showing the total annual cost of ordering and storing XL-20 for each of the following order quantities: 500, 1,000, and 2,000 canisters.

	Order size
	500	1000	2000
Number of orders
Ordering cost
Average inventory
Holding costs
Total annual costs