Your cousin vinny remodeled an old beach house last year. vinny put on a new roof and shelled the driveway. this year, he needs to upgrade the electricity and replace most of the plumbing. you asked him, "why don't you just sell? " vinny waved a stack of invoices in your face and said, "i already put this much money into the place! " this statement is an example of the type of judgment error.

An allergy products superstore buys 6000 of their most popular model of air filters each year. the price of the air filters is $18. the cost of ordering and receiving shipments is $12 per order. accounting estimates annual carrying costs are 20% of the price. the supplier lead time is 2 days. the store operates 240 days per year. each order is received from the supplier in a single delivery. there are no quantity discounts. what is the store’s minimum total annual cost of placing orders & carrying inventory?