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ABC is a retailer who sells packages of blank DVDs to its customers. It purchases packages of DVDs from XYZ at $ 1 4 a

ABC is a retailer who sells packages of blank DVDs to its customers. It purchases packages of DVDs from XYZ at $14 a package. XYZ pays all incoming freight. No incoming inspection is necessary, as XYZ has a superb reputation for delivering quality merchandise. Annual demand is 13,000 packages, at a rate of 250 packages per week. ABC requires a 15% annual return on investment. The purchase order lead time is 2 weeks. The following cost data are available:
Relevant ordering costs per purchase order $200
Relevant carrying costs per package per year:
Required annual return on investment, 15%* $14= $2.10
Relevant insurance, materials handling, breakage, etc., per year $3.10 $5.20
a.- What is the EOQ of packages of DVDS?

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