Problem on the annual total costs
Business & Finance

Tutor: None Selected  Time limit: 1 Day 
Post Card Depot, an large retailer of post cards, orders 3,160,080 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 8 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.06 per post card per year. The ordering cost is $233 per order.
What is the annual total costs of post card inventory?
Thank you for the opportunity to help you with your question!
No of post cards ordered in 1 year = 3,160,080
Carrying Cost of each post card = $0.06
Therefore total Carrying cost of 3,160,080 post cards = No of post card X cost of each post card
= 3,160,080 X 0.06
= $189,604.80
Cost of each order of post card = $233
Therefore total cost of 8 times order = cost of each order X no of order
= $233 X 8
= $1,864
Therefore annual total costs of post card inventory = Total Carrying cost + Total cost of 8 times order
= $ 189,604.80 + $1,864
= $191,468.80
Annual total costs of post card inventory = $191,468.80
Please let me know if you need any clarification. I'm always happy to answer your questions.
Secure Information
Content will be erased after question is completed.