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A manufacturer has to supply his customers 52,800 units of his product per year. The unit cost of the product is Ksh. 20 and the

A manufacturer has to supply his customers 52,800 units of his product per year. The unit cost of the product is Ksh. 20 and the inventory carrying charges are 10% per annum. The cost of one procurement amounts to Kshs. 300. Determine:

Demand 100 150 200 250 300
Probability 0.20 0.25 0.30 0.15 0.10

i) Economic order quantity. ii) Number of orders per year. iii) Optimum period of supply per optimum order. iv) Optimum cost.

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