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Question 20 (25 points) Timber Company purchase 300,000 units of a deluxe product each year. The cost of an order is $400; the cost of

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Question 20 (25 points) Timber Company purchase 300,000 units of a deluxe product each year. The cost of an order is $400; the cost of carrying one unit in inventory for a year is $15. The item cost $50 each. Timber currently current order size is 5.000 deluxe units per order. Paragraph B IV - 1. Compute the ordering and carrying costs using the company current policy (4 marks) 2. Calculate the order size using EOQ. (4 marks) I (/) 1. Compute the ordering and carrying costs using the company current policy (4 marks) 2. Calculate the order size using EOQ. (4 marks) 3. Calculate the ordering and carrying costs using EOQ. (4 marks) 4. If Timber is offered a discount of 25 cents per unit to order 5,000 per order should the offer be accepted or should the company place order using EOQ? (4 marks) 5. Explain in your own words traditional reasons for carrying inventory? 9 marks)

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