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Pepsi Co. desires to control inventory levels so as to minimize the sum of holding and ordering costs. It costs the firm $20 to
Pepsi Co. desires to control inventory levels so as to minimize the sum of holding and ordering costs. It costs the firm $20 to place an order. The firm estimates its holding cost percentage is 30% per year. The weekly demand is 100 units. The item costs $10 per unit. If 200 units are ordered each time, approximately what is the total annual holding and annual ordering costs? Assume 50 weeks each year.
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