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gulaghasi [49]
3 years ago
9

Store A purchases cases of fertilizer for its lawn-care business from a supplier who charges Store A $30 per order and $50 per c

ase. Each case consists of five bags of fertilizer. Store A needs 2000 bags of fertilizer a year. Store A's annual holding costs are 30%. If Store A's order quantity is 40 cases and its lowest inventory level is 0 cases, what is its average inventory level (in cases)
Business
1 answer:
Lapatulllka [165]3 years ago
6 0

Answer:

20

Explanation:

Calculation for average inventory level

Using this formula

Average inventory level=Store A's order quantity/2

Let plug in the formula

Average inventory level = 40 cases /2.

Average inventory level= 20

Therefore the Average inventory level will be 20

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