What is the annual total costs of post card inventory?

Business & Finance
Tutor: None Selected Time limit: 1 Day

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

Thank you for the opportunity to help you with your question!

                   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

Please let me know if you need any clarification. I'm always happy to answer your questions.
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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