Question:

A distributor sellsindustrial tools. He has a sales estimate of 20 crore for the upcoming year. Each tool sells for10,000. Assume that the demand remains constant throughout the year.

The ordering cost per orderis 10,000 and the carrying cost per tool is 10% of its selling price.

How many units should the distributor order in a batch? (You should round up your answer to avoid shortfall.)

Options:

1. 64
2. 80
3. 633
4. 431