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A company expects to order 1,500,000 units for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering
A company expects to order 1,500,000 units for inventory during the coming year, and it will use this inventory at a constant rate. Fixed ordering costs are $25 per order; the purchase price per unit is $2.75; and the firms inventory carrying costs is equal to 11% of the purchase price. (Assume a 360-day year.)
What is the economic ordering quantity?
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