ABC Company deals with an annual demand of 12,000 units for a specific component. Each order they
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Question:
ABC Company deals with an annual demand of 12,000 units for a specific component. Each order they place incurs a cost of $200. Additionally, the carrying cost per unit per year is $5. This carrying cost includes expenses related to storing and maintaining inventory. The objective is to determine the optimal order quantity that minimizes the total cost of inventory, considering both the ordering cost and carrying cost. What quantity should ABC Company order each time to strike the balance and minimize their overall inventory expenses throughout the year?
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