A mining company routinely replaces a specific part on their equipment. The usage rate is 40/week, and
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A mining company routinely replaces a specific part on their equipment. The usage rate is 40/week, and there is no seasonality. The supplier of the part offers the following discount structure
Q<300 units - $10/unit
Q>300 units - $9.7/unit
The fixed cost of a replenishment is $25, and a carrying cost is $0.26/unit/year.
What replenishment size should be used?
Must show all work handwritten.
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