Abey Kuruvilla, of Parkside Plumbing, uses 1 comma 200 of a certain spare part that costs $24 for each order, with an annual holding cost of $24. a) Calculate the total cost for order sizes of 25, 40, 50, 60, and 100 (round your responses to two decimal places).

The total cost is $345,600 at each order size.

Explanation:

Given that,

Annual holding cost = $24

Fixed cost each order = $24

Units demand per year = 1,200

(a) At order size of 25,

Total inventory cost:

= Annual holding cost * Fixed cost each order * (Order quantity : 2) * (Units demand per year : Order quantity)

= $24 * $24 * (25 : 2) * (1,200 : 25)

= $345,600

(b) At order size of 40,

Total inventory cost:

= Annual holding cost * Fixed cost each order * (Order quantity : 2) * (Units demand per year : Order quantity)

= $24 * $24 * (40 : 2) * (1,200 : 40)

= $345,600

(c) At order size of 50,

Total inventory cost:

= Annual holding cost * Fixed cost each order * (Order quantity : 2) * (Units demand per year : Order quantity)

= $24 * $24 * (50 : 2) * (1,200 : 50)

= $345,600

(d) At order size of 60,

Total inventory cost:

= Annual holding cost * Fixed cost each order * (Order quantity : 2) * (Units demand per year : Order quantity)

= $24 * $24 * (60 : 2) * (1,200 : 60)

= $345,600

(e) At order size of 100,

Total inventory cost:

= Annual holding cost * Fixed cost each order * (Order quantity : 2) * (Units demand per year : Order quantity)

= $24 * $24 * (100 : 2) * (1,200 : 100)

= $345,600