Pepsi Co. desires to control inventory levels so as to minimize the sum of holding and ordering
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Question:
Pepsi Co. desires to control inventory levels so as to minimize the sum of holding and ordering costs. It costs the firm $20 to place an order. The firm estimates its holding cost percentage is 30% per year. Weekly demand is 100 units. The item costs $10 per unit. If 200 units are ordered each time, what is the time between two stock replenishments (in weeks)? Assume Pepsi operates 50 weeks each year.
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