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Illustration 10 A manufacturer purchases 1000 units of a certain component p.a. @ $20 per unit from outside supplier. The annual usage is 1000 units,

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Illustration 10 A manufacturer purchases 1000 units of a certain component p.a. @ $20 per unit from outside supplier. The annual usage is 1000 units, placing an order cost is $80 per order and carrying cost on average inventory is $5. Calculate the Economic Order Quantity by tabular method. Also calculate the number of orders to be placed per year. Solution

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