The operator of a concession at a downtown location estimates that he will sell 490 bags of
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Question:
The operator of a concession at a downtown location estimates that he will sell 490 bags of circus peanuts during a month. Holding costs (annual) are 33 percent of unit price and ordering cost is $5. The price schedule for bags of peanuts is : 1 to 199, $2.5 each; 200 to 499, $2.47 each; and 500 or more $2.44 each. What order size would be most economical ?
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