Suppose annual demand for a given item is 1,200 units. For this item, ordering cost is $60 and the annual cost of holding a unit in inventory is $10. Further suppose that currently this item is ordered in quantities of 120.
How much money would be saved by switching to an optimal order quantity?
A. Not in excess of $100
B. In excess of $100 but not in excess of $200
C. In excess of $200 but not in excess of $600
D. In excess of $600 but not in excess of $1,000
E. In excess of $1,000