3. Sam's Watch Shop sells 2,500 watches a year. The store estimates that it costs $4 per year to carry a watch in inventory and $100 to place an order for watches. (a) Determine the total inventory costs associated with an order size of 500 and (b) compute the economic order quantity.

Question

3.  Sam's Watch Shop sells 2,500 watches a year. The store estimates that it costs $4 per year to carry a watch in inventory and $100 to place an order for watches. (a) Determine the total inventory costs associated with an order size of 500 and (b) compute the economic order quantity.