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Suppose that a firm expects total demand (S) for its product next year to be 5,000 units. Moreover, to place an order the firm incurs
Suppose that a firm expects total demand (S) for its product next year to be 5,000 units. Moreover, to place an order the firm incurs an ordering cost (O) of $200, and the carrying cost per unit (C) is $2. What is the economic order quantity (Q*) for the company?
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