Question: Redan Manufacturing uses 1,500 switch assemblies per week and then reorders another 1,500. The relevant carrying cost per switch assembly is $5.00, and the fixed

Redan Manufacturing uses 1,500 switch assemblies per week and then reorders another 1,500. The relevant carrying cost per switch assembly is $5.00, and the fixed order cost is $750.

What is the current carrying cost?

Carrying cost

What is the order cost?

Order cost

Calculate the economic order quantity.

EOQ

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