Question: Annual demand for a component is 20,000 units per year. Storage cost per unit per year is 8 and each order costs 200. What is

Annual demand for a component is 20,000 units per year. Storage cost per unit per year is £8 and each order costs £200. What is the company's economic order quantity?

1.

5,000 units.

2.

4,000 units.

3.

1,000 units.

4.

500 units.

5.

2,000 units.

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