A company uses components at the rate of 500 units per month, which are bought in at a cost of $1.20 each from the supplier. It costs $20 each time to place an order, regardless of the quantity ordered. The total holding cost is 20 % per annum of the value of inventory held. What is the total annual cost? A $120 B $240 C $7,320 D $7,440
total annual cost = Purchase cost per unit*demand per anum + ( cost of placing one order*Demand per annum/Q) + (cost og holding oe unit for one year * Q/2)