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ABC Motors purchases 9 0 0 0 units of spare parts for its annual requirements, ordering one month usage at a time. Each spare part

ABC Motors purchases 9000 units of spare parts for its annual requirements, ordering one month usage at a time. Each spare part costs Rs.20. The ordering cost per unit is Rs.15 and the carrying charges are 15% of unit cost. You have been asked to suggest a more economical purchasing policy for the company. What advice would you offer, and how much would it save the company per year?

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