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MaWood Limited uses the economic order quantity (EOQ) model to establish the re order quantity for raw material Y. The company holds no buffer stock.

MaWood Limited uses the economic order quantity (EOQ) model to establish the re order quantity for raw material Y. The company holds no buffer stock. Information relating to raw material Y is as follows:

AnnualUsage 48,000 units

PurchasePrice

80 per unit

Ordering Costs

120 per order

Annualholding costs 10% of the purchase price


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