Question: Downey Disks is experiencing some inventory control problems. The manager currently orders four times each year with the annual purchase of the inventory costing $

Downey Disks is experiencing some inventory control problems.
The manager currently orders four times each year with the annual
purchase of the inventory costing $200,000. Each inventory item
costs $5, ordering costs are $125, and each item costs $2.50 to
carry. What is the opportunity cost of the present ordering system
as compared to an EOQ ordering system?

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