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A company has an annual demand of 2,55,000 tons of steel. Further, each order that the company places involves a fixed ordering cost of 450,

A company has an annual demand of 2,55,000 tons of steel. Further, each order that the company places involves a fixed ordering cost of 450, while the annual carrying cost of the inventory is about 45 per ton. What should be the order size to ensure minimum costs? (You should round up your answer to avoid shortfall.)

Options:

  1. 1,081 tons
  2. 3,043 tons
  3. 1,503 tons
  4. 2,259 tons

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