The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the order quantity is 700 per order. what is the ordering cost?

a.

215

b.

740

c.

685

d.

28000