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A pottery company required 3500 tonnes of clay per annum to produce garden pots and the cost per order was $100 and the carrying cost

A pottery company required 3500 tonnes of clay per annum to produce garden pots and the cost per order was $100 and the carrying cost was $0.80 per tonne.

Required:

a) What would be the economic order quantity of clay (how many tonnes at a time should be ordered)?

b) What would be the reorder point of their clay stocks? (in tonnes)

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