##### What is the annual total costs of post card inventory?

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Post Card Depot, an large retailer of post cards, orders 4,219,610 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 6 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is \$0.17 per post card per year. The ordering cost is \$426 per order.

What is the annual total costs of post card inventory?

(Round the answer to two decimal places).

Oct 6th, 2015

No of post cards ordered in 1 year = 4,219,610

Carrying Cost of each post card                    = \$0.17

Therefore total Carrying cost of 4,219,610 post cards = No of post card    X   cost of each post card

= 4,219,610   X   0.17

= \$717,333.70

Cost of each order of post card    =  \$426

Therefore total cost of 6 times order  = cost of each order    X   no of order

=  \$426   X   6

=  \$2,556

Therefore annual total costs of post card inventory  = Total Carrying cost    +   Total cost of 6 times order

=  \$717,333.70  +  \$2,556

=  \$719,889.70

Annual total costs of post card inventory   =   \$719,889.70

Oct 6th, 2015

Hi, Thanks for your response. My professor came up with \$62,333.81. You think you can help me how she got that?

Oct 7th, 2015

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Oct 6th, 2015
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Oct 6th, 2015
Oct 17th, 2017
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