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Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1

Item X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,500 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $5 per unit of average inventory. Every time an order is placed for more of item X, it costs $6.
Using EOQ model, after finding the optimal order quantity, what is the annual cost for ordering item X?

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