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A firm uses an inventory item with the following characteristics. Cost per-item $6.00 Annual consumption 1,000 Fixed cost per order placed $30.00 Carrying cost of
A firm uses an inventory item with the following characteristics.
| Cost per-item | $6.00 |
| Annual consumption | 1,000 |
| Fixed cost per order placed | $30.00 |
| Carrying cost of inventory (as a % of dollar value) | 25% |
How many times should the product be reordered each year and what are the related carrying costs and ordering cost?
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