Question
True pic faces a demand of 6,000 units per month for one of its lines of stock. The firms cost of holding stock is 2
True pic faces a demand of 6,000 units per month for one of its lines of stock. The firms cost of holding stock is 2 per unit of average stock per month, and it costs the firm 50 every time it orders and acquires a new shipment of stock. The firm is willing to face stockouts and the cost of such is 3 per unit of average stock out per month. The firm attempts to minimise inventory costs with the EOQ model. What level of stockout will have arisen just before new orders are received in the firm's warehouse (rounded to the nearest unit)?
A 123
B 289
C 424
D 548
E 707
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