Warehouse Budget

Planned units that are brought in (to a warehouse) are as follows.

Units

Month Brought In

1 86

2 100

3 116

4 135

5 157

6 182

7 211

8 245

9 284

10 329

Number of months units sit on shelf before being removed: 5

(For instance, units bought in month 1 are sold in month 6.)

Assume units are bought in or removed in the middle of each month.

Also, there are two warehouses that we plan to store units in.

One is close by and the other is far away.

Details for the warehouse close by

Fixed cost per month: 740

Maximum capacity: 619

Details for the warehouse far away

Variable cost per unit: 5

Maximum capacity: Unlimited What will be the total cost of storing our units from now through end-of-month 10?

A Between 5,000 and 10,000

B Between 10,000 and 20,000

C Between 20,000 and 30,000

D Between 30,000 and 40,000