Ready Tees, an online retailer of t-shirts, orders 100,000 t-shirts per year from its manufacturer. The cost of ordering and delivery is $100 per order
If Ready Tees orders 6,667 t-shirts in each order, what are the firm's total annual ordering costs (rounded to the nearest dollar)?
A) $2,000
B) $1,500
C) $1,000
D) $667
Answer: B
Explanation: B) Total annual ordering costs = OC × (S/Q) = $100 × (100,000/6,667) = $1,499.93 ≈ $1,500.
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