PharmaMart sells 100,000 boxes of a drug, Zapacal, annually. Each box costs $90 each. Costs to prepare and receive each shipment are estimated to be $30 per shipment. The Supplier charges a shipping and handling fee of $100 per shipment. To ensure that the shipment meets quality, each shipment is tested at a cost of $50. The carrying costs (utilities and cost of financing) to store the inventory in the warehouse is estimated to be $2.1 per box.

What is the Economic Order Quantity (EOQ)?

Answer rating: 100% (QA)

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