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Company A purchases 3 6 , 0 0 0 bags of sugar each year. They pay $ 2 0 to place each order and have
Company A purchases bags of sugar each year. They pay $ to place each order and have an annual carrying cost of of the purchase price per bag. Each bag costs $ and management likes to keep bags for safety stock. The sugar vendor now offers a quantity discount of $ per bag when Margos orders bags. Determine the EOQ. Calculate the Total Inventory Cost at EOQ with safety stock. Determine the before tax benefit or loss of accepting the quantity discount.
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