Management in the Sharp, Inc., examples underestimates total annual demand by 50% (say demand is actually 1,500

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Management in the Sharp, Inc., examples underestimates total annual demand by 50% (say demand is actually 1,500 needles rather than 1,000 needles) while using the same Q. How will the annual inventory cost be impacted?

APPROACH c We will solve for annual costs twice. First, we will apply the wrong EOQ; then we will recompute costs with the correct EOQ.

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