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Fixed costs of an order is $200, inventory holding rate is 20%, item value is $50, and annual demand is 7000 units/year. Answer the following:
Fixed costs of an order is $200, inventory holding rate is 20%, item value is $50, and annual demand is 7000 units/year. Answer the following: a) Find the economic order quantity. b) Suppose quantities must be ordered in factors of hundreds (e.g., 100, 200, etc.), find the economic order quantity in this case. c) Determine the total annual cost, number of orders, and time between orders for your answer in (a), (b). d) Suppose replenishment lead time is 2 weeks, what is your reorder point for (a), (b) ? Is the reorder point same or different between (a) and (b) ? Why ? e) If the order quantity is 1.3 times Q* from (a), how does it affect the total cost
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