Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 264 units. This model costs Ray $227 to purchase from his supplier. His annual cost to carry inventory is 23% and he estimates that orders cost $25 to process.
If Ray used an order quantity of 2000 instead of the optimal order quantity, how much money would he be wasting each year?