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Balaji Soaps is a manufacturing company of different types of soaps. The product portfolio of the company includes 1 0 0 percent Natural & Aromatherapy

Balaji Soaps is a manufacturing company of different types of soaps. The product portfolio of the
company includes 100 percent Natural & Aromatherapy Soaps, Toilet Soaps, Fancy Soaps, Sandal Soaps,
Handmade Soaps, Specialty Soaps, and Herbal Soaps.
The annual usage of raw material is 51500 units for the company and the raw material cost per unit is
Rs.52. The ordering cost is Rs.220 per order and the carrying cost is 22 percent of the average value of
the raw material. The supplier of raw material has recently introduced a discount of 5 percent on the price
of raw material for orders of 1650 units and above. Calculate the companys EOQ prior to the
introduction of discounts. Should the company opt for availing the discount? What would be the optimal
order size if the company opts to avail the discounts?

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