Question: The yearly demand for a widget is 5000 units. The cost of ordering is $100 per order and the cost of holding is $4 per

The yearly demand for a widget is 5000 units. The cost of ordering is $100 per order and the cost of holding is $4 per unit per year. The widget was ordered in batches of 1000 units and the firm changes the policy to order as per the economic order quantity. What is the saving in total inventory related costs because of the change in the ordering policy? (Inventory related costs include holding and ordering costs)

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