Ready Tees, an online retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer. Ready will order t-shirts 12 times over the next year. Ready receives the same number of t-shirts each time it orders
The carrying cost is $0.10 per shirt per year. What is the annual carrying cost of the t-shirt inventory (rounded to the nearest dollar)?
A) $417
B) $834
C) $5,000
D) $10,000
Answer: A
Explanation: A) Total annual carrying costs = CC × (Q/2) = $0.10 × (8,333/2) = $416.67 ≈ $417.
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