Companies often use this formula to determine how much of a certain item to order: where Q

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Companies often use this formula to determine how much of a certain item to order:

image text in transcribed

where 

Q = order quantity 

D = annual demand 

S = ordering cost 

H = annual holding cost per unit 

If annual demand is 400 units, ordering cost is $36, and annual holding cost is $2 per unit, what is the order quantity?

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Operations Management

ISBN: 9781260575712

14th International Edition

Authors: William J Stevenson

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