A textile firm uses 15 tons (15 000 kgs) of cotton during a year. The price of cotton is 15 TL per kg. The holding cost of keeping cotton in inventory is equal to 20% of the buying price. The acquisition cost per one order is calculated as 100 TL. Given this; calculate

(a) optimal (economic) order size that will minimize the costs

(b) How many orders must be given in a year to minimize the costs and at what intervals?

Answer rating: 100% (QA)

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