If an average inventory is 2000 units, annual relevant carrying cost of each unit is $5, then annual relevant carrying cost will be
A. $5,000
B. $4,500
C. $5,500
D. $6,000
Answer: Option A
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average inventory ka half carry hota h
so 2000/2 = 1000 * 5 =1000
total carrying cost= 1/2 *order size *carrying cost per unit per annum
1/2*2000*5= 5000