Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 2,500 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $10 per unit of average inventory. Every time an order is placed for more item X, it costs $18.

Required:

(a) Whenever item X is ordered, what should the order size be? (Round your answer to the nearest whole number.)

Order size

(b) What is the annual cost for ordering item X? (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Annual cost for ordering item $

(c) What is the annual cost for storing item X? (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Annual cost for storing item $