The purchase price of an inventory item is $25 per unit. In each three-month period the usage
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The purchase price of an inventory item is $25 per unit. In each three-month period the usage of the item is 20,000 units. The annual holding costs associated with one unit equate to 6 per cent of its purchase price. The cost of placing an order for the item is $20.
What is the economic order quantity for the inventory item (to the nearest whole unit)?
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