Ralph was in the process of completing the quarterly planning for the purchasing department when amajor computer
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Question:
following:
Average inventory level of XXX200
Orders per year40
Average daily demand48
Working days per year250
Annual ordering costs$4,000
Annual carrying costs$6,000
Ralph purchases at the EOQ quantity level.
Required:
Determine the annual demand, the cost of placing an order, the annual carrying cost of one unit, and the economic order quantity.
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