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A local retailer of plumbing supplies faces demand for one of its SKUs at a constant rate of 9 , 0 0 0 units per
A local retailer of plumbing supplies faces demand for one of its SKUs at a constant rate of units per year. The unit cost of the SKU is per unit. The cost of capital is per year, which implies the annual holding cost per unit is of It costs the retailer to process an order to replenish stock.
What is the optimal order quantity of the SKU in each order cycle?
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