Annual

Customer No of Consump Consump Order Order Transportation Unit Cost( C)

Type Customers tion Size(Q) Frequency(n) Cost(S)
tion(D)
Small 12 1000 12000 40000 0.3 $ 400.00 $ 1.00
Medium 6 5000 60000 40000 1.5 $ 400.00 $ 1.00
Large 2 12000 144000 40000 3.6 $ 400.00 $ 1.00

ns
nm
nl
 Annual Annual
holding
ordering holding Total Cost
Cost(h)
Cost(OC) Cost(HC)
$ 120.00 $ 0.25 $ 5,000.00 $ 5,120.00
$ 600.00 $ 0.25 $ 5,000.00 $ 5,600.00
$ 1,440.00 $ 0.25 $ 5,000.00 $ 6,440.00
Total Cost $17,160.00
Total Cycle Inventory $60,000.00