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Each unit of an item costs a company 4 0 with annual holding costs of 1 8 per cent of unit cost for interest

Each unit of an item costs a company £40 with annual holding costs of 18 per cent of unit cost for interest charges, 1 per cent for insurance, 2 per cent allowance for obsolescence, £2 for building overheads, £1.50 for damage and loss and £4 miscellaneous costs. If the annual demand for the item is constant at 1,000 units and each order costs £100 to place, calculate the economic order quantity and the total cost of stocking the item. If the supplier will only deliver batches of 250 units, how does this affect the costs?

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The Economic Order Quantity EOQ is the number of units that a company should order to minimize its t... blur-text-image

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