ABC Co. buys in lots of 125 boxes which is a three month's supply. The cost per
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Question:
ABC Co. buys in lots of 125 boxes which is a three month\'s supply. The cost per box is $125 and the ordering cost is $250 per order. The inventory carrying cost is estimated at 20% of unit value per year. You are required to ascertain:
i. The total annual cost of existing inventory policy?
ii. How much money would be saved by employing the economic order quantity?
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