Question: Inventory problem Using EOQ (Economic Order Quantity) Model Walter Inc, has an annual demand for airport metal detectors of 1,400 units. The cost of a

Inventory problem Using EOQ (Economic Order Quantity) Model

Walter Inc, has an annual demand for airport metal detectors of 1,400 units. The cost of a typical detector is $400. It is estimated that the cost for handling is 20% of the cost unit and that the cost of ordering is $25. If Walter, the owner, orders 300 or more units, he would get a 5% discount on the cost of the detectors.

Should Walter take advantage of the Amount discount?

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