Business, 05.07.2020 14:01 catsRlife4573

Using a computerized Inventory Management System, a Paint Supply Store franchise continuously monitors the inventory of all the paint located at each of their 15 stores and their distribution warehouse. The Paint Supply Store franchise sells an average of 30 gallons of Red Paint every week (for 52 weeks per year). Their current policy is that when they place an order for Red Paint from their supplier, they order 70 gallons at a price of $2.00 per gallon. [The company does not hold Safety Stock] It takes 1.25 weeks to receive an order from the supplier.
Administrative costs for Ordering paint have been estimated to be $15 per order.
Holding Costs = 20% of the purchase price per gallon per year.
What is the Total Annual Inventory Cost for the company's current policy?
A. $348.29
B. $370.43
C. $75.40
D. $341.29
E. $249.60

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