Suppose that its setup cost for ordering was really only $15. Determine the error made in calculating

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Suppose that its setup cost for ordering was really only $15. Determine the error made in calculating the annual cost of holding and setup incurred as a result of its using the wrong value of K.

(Note that this implies that its current order policy is suboptimal.)

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Production And Operations Analysis

ISBN: 9781478623069

7th Edition

Authors: Steven Nahmias, Tava Lennon Olsen

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